This paper present a study of the small signal stability applied to an electric power system, with the consideration of the Power System Stabilizer and using the theory of the optimal control. A new theory based on pole placement using optimal regulators is proposed for damping electromecha-nical oscillation, under small signal. The proposed algorithm builds Q and R in such a way that the system response also obeys conventional criteria for the system pole location. The Power Sensitivity Model is used to represent the electric power system. Information about the stability of the electric power system, when subjected to small disturbances, is illustrated by numerical examples.