The effects of acoustic modes in the penstock on the self-excited oscillation in hydraulic power system were studied by assuming a finite sound velocity in the penstock. The flow in the draft tube is considered to be incompressible assuming that the length of the draft tube is smaller than the wavelength of the oscillation. It was found that various acoustic modes in the penstock can become unstable (amplified) by the diffuser effect of the draft tube or the effect of swirl flow from the runner. Their effects on each mode are discussed.