This work investigates the impact of increased penetration of doubly fed induction generators (DFIGs) on electromechanical modes of oscillations of a large interconnected power system. The work proposes a control mechanism aimed at designing the power system stabilizer (PSS) for a DFIG similar to the PSS of synchronous machines. The wind generator power output is taken as input to the PSS. The active power command is modulated in phase opposition to the power system oscillation and is fed to the active power control loop of the DFIG. An additional control block with the DFIG terminal voltage as the PSS input signal is fed to the reactive power control loop. The mechanism serves the purpose of improving the damping of critical mode which is validated by eigenvalue analysis. The work also compares two different control mechanisms that can be employed for damping low frequency inter area modes of oscillations. With the latter based on the idea of modifying the torque set point of the DFIG for changes in grid frequency. The proposed technique is tested on a large test system representing the Midwestern portion of the U.S. interconnection.