Paper deals with analysis of possible optimization of synchronous generator's excitation system. Authors examine influence of excitation system's parameters to the dynamics of transient processes in the power system. Authors investigated optimal parameters of excitation system of the Kegums hydro power plant. For optimization of parameters genetic algorithms was used. The problem of the mutual influence of excitation systems of neighbor power plants was investigated. Investigation of transient processes using developed model proved that optimization of excitation parameters improves efficiency of regulation of excitation system, damping of active power oscillation and in some cases can prevent out-of-step condition.