This paper introduces a new method to detect out-of-step condition in power system based on an energy equilibrium criterion in the time domain directly. The proposed criterion is obtained using the concepts of equal area criterion in power angle domain but eliminates the need for numerical computations required in the earlier algorithm. The proposed algorithm uses power-time curve for computing the system transient energy to detect the stability of the system. The effectiveness of the proposed algorithm is tested on a single machine infinite bus and a three machine infinite bus system. The simulation results show that the proposed algorithm is general, accurate and applicable to complex power systems.