The objective of this paper is to design an H?-based local decentralized PSS (Power System Stabilizing) controller. The controller is designed for separate damping of specific inter-area modes while considering time-delay. The controller uses remote signals, selected suitably from the whole system, as supplementary inputs. The wide area or global signals have been obtained where the oscillations in the remote network locations could be well observed. The PSS controller uses only those local and remote input signals in which the assigned single inter-area mode is most observable and is located at a generator which is most effective in controlling that mode. A long timedelay due to remote signal transmission and processing in WAMS (Wide Area Measurement System) can cause system instability and degradation of system robustness. Therefore, this paper uses the time-delay compensation method that uses lead or lag adjustment method while integrates the gain scheduling to overcome the impacts of constant time-delay. The effectiveness of the resulting PSS controllers is established through simulations using three machine three area test power system.