Diagnosis of power system faults requires the identification and classification of voltage disturbances in power systems and smart grids. The objective of this approach is to develop state-of-the-art signal classification algorithms for classifying different types of power quality disturbances (faults) based on latest improvements in signal processing and pattern recognition techniques. This presentation proposes a new solution for power system monitoring against all possible power quality issues. The S-transform is used for analysing distorted power signals. As a classifier, a decision-tree algorithm is used, and its performance is compared to other classifiers. The proposed hybrid power-system monitoring system is able to detect common power system disturbances, such as voltage sag/swell/flicker, the DC component, electromagnetic interference, harmonics, transients and blackouts.