A new technique is described for the automatic formation of dynamic equivalents of generating units represented by detailed models. The method applies to groups of generating units that are coherent. A coherent group of generating units, for a given perturbation, is a group of generators oscillating with the same angular speed, and terminal voltages in a constant complex ratio. Thus, the generating units belonging to a coherent group can be attached to a common bus, if necessary through an ideal, complex ratio transformer. The dynamic equivalent of a coherent group of generating units is a single generating unit that exhibits the same speed, voltage and total mechanical and electrical power as the group during any perturbation where those units remain coherent. The parameters of an equivalent model of governor, turbine, synchronous machine, excitation system and power system stabilizer are identified for each group of coherent units, by means of a least- square fit of their transfer functions. The technique is demonstrated with a large system stability data base. A brief discussion of paper is appended.