To compensate for the shortcomings in the grid-rated aspects of AC variable-speed pumped storage units, and given China’s technical requirements for the grid connection of large-scale generators, a design approach for a single-channel power system stabilizer (PSS) suitable for AC variable-speed pumped storage units is proposed. A collaborative response strategy between variable-speed and constant-speed units is also provided. On excitation system characteristics, the differences between variable- and fixed-speed units are compared and analyzed, and the transfer function structure of the PSS is improved. An estimation method for relevant parameters is proposed, one which can adapt to the grid connection requirements of AC variable-speed pumped storage units. For in-plant coordination, a collaborative response scheme based on variable modal decomposition technology is studied for the collaborative control requirements of variable- and fixed-speed units, and the overall response effects of pumped storage power plants are compared. These can be used to guide practical engineering of the first variable-speed unit. To conduct simulation analysis, an IEEE 9-node system is built, and real wind farm data is used to construct a power grid disturbance scenario. This verifies the effectiveness of the proposed method.