•Ability to trace the source of both forced and natural oscillations.•PMU application providing actionable information for operations.•Efficiency confirmed by multiple simulated and actual events.•Estimation of generator’s damping contribution into specific mode. The modification of an energy-based approach called the dissipating energy flow (DEF) method is proposed, which uses data from phasor measurement units (PMUs) to trace the source of poorly damped natural and forced oscillations in power systems. The original energy-based approach (Chen et al., 2013) assumes the ability to determine steady-state values of variables measured by PMU during the transient process and that prevents the reliable use of the original method with actual PMU data. PMU data processing, proposed in the DEF method, is a key step in converting the energy-based method into a robust and automated tool for use with actual PMU data. The effectiveness of the proposed DEF method is demonstrated by testing multiple simulated cases of sustained oscillations, including both poorly damped natural and forced oscillations and more than 30 actual events in ISO New England (ISO-NE) and two events in Western Electricity Coordination Council (WECC) systems. The study also demonstrates the potential for using the DEF method to estimate the contribution of any generator to the damping of a specific oscillation mode.