In order to maintain power system stability and process survivability for major system faults under a variety of system configuration topologies, the selection of proper governor system is essential. Islanded power systems present very distinct challenges, whereby the lack of utility interconnection hinders the system's ability to recover from a loss of generation. In order to maintain power system stability in an islanded configuration, fast acting governor system in response to a specific event in the plant is the key factor governing plant survivability. In this paper an attempt has been made to study the performance of different excitation and Governor models of captive Generator sets for an Industry which supplies both process and utility load and exports to national grid. A new governor model is also developed to improve the transient stability performance captive generator system thus improve the reliability of power generation of captive power plant (CPP). The analysis was done using Electrical Transient Analysis Program (ETAP) Version 11 software and the simulation results are depicted in the graphs. © 2016 Elsevier Ltd. All rights reserved.