To enhance the rapid response capability and operational stability of hydraulic generating units, a unit simulation model was established to investigate the damping characteristics, frequency characteristics, and stability under the novel power regulation mode of the governor derived from water turbine characteristic curves. Two improved strategies for the novel power regulation mode were developed. Results demonstrate that compared with conventional power regulation modes, the novel power regulation mode exhibits greater negative damping of the units, leading to inferior stability in small-grid operations but better frequency-modulated fast-acting in large-grid operations. Both the interpolation output control strategy and the guide vane speed control strategy can effectively suppress reverse regulation of power but both partially sacrifice the system’s primary frequency-modulated fast-acting. The guide vane speed control strategy shows superior suppression of reverse regulation of power, whereas the interpolation output control strategy offers better compatibility with other governor regulation functions.