Dynamic equivalencing has been developed to address the computational issues raised by the need for the dynamic security assessment (DSA) of modern interconnected electric power systems. As an effort to incorporate dynamic equivalencing into the on-line DSA, a new Dynamic Reduction Program (DYNRED) has been developed by EPRI in 2010. It provides a more compatible environment for current component models and practical realization of coherency identification and generator aggregation methodologies. This study is dedicated to validate the efficacy of the new DYNRED for applications in large-scale electric power systems. The reduced systems based on different buffer areas (the retained area additional to the study area) have been tested. In addition, an analytical approach to identify the critical generators in forming the proper buffer area has also been proposed. The effectiveness of the proposed approach in enhancing the feasibility of DYNRED in practical applications has been demonstrated.