Over the last five to ten years, significant progress has been made in high‐power semiconductor devices and in their practical applications to power systems. This comes not only from sophisticated semiconductor technology but also from the demand for a higher degree of frequency and voltage stability, and for greater reliability in power systems. This paper deals with an adjustable speed rotary condenser capable of not only reactive power control but also active power control based on a flywheel effect of the rotor. The behavior of a power system consisting of the adjustable speed rotary condenser, a synchronous generator, and a transmission line is subjected to a set of nonlinear differential equations. The set of nonlinear equations can be linearized by limiting attention to small perturbations around a reference state, thus leading to the so‐called Heffron–Phillips model of the power system. The Heffron–Phillips model derived is effective in analyzing effects of the adjustable speed rotary condenser on power system stabilization. The validity of the analysis is confirmed by computer simulation based on EMTDC. Finally, it is discussed how well power system stabilization is achieved by the rotary condenser. As a result, the rotary condenser has the function of decoupling reactive power control from active power control, thus producing a good effect on power system stabilization which would not be achieved by a conventional inverter‐based static var compensator. © 2000 Scripta Technica, Electr Eng Jpn, 133(1): 31–42, 2000