This paper discusses the characteristics of sheath circulating current as well as the development and application of new software for underground power cable systems. Generally, in steady state, high sheath circulating current causes the increase of sheath temperature and thermal resistance which leads to the steeply reduction of the power capacity. Therefore, the exact calculation of sheath circulating current is required for analysis about the influence of high sheath current on permissible current. In this paper, Power Cable Simulator is developed for calculation of the sheath current. It can analyse the sheath current by real time. It is also easier to use than conventional software, such as EMTP and CabSim, because all the data for calculating the cable parameters are stored in a database(DB) within Power Cable Simulator. In addition, the accuracy of Power Cable Simulator is also proved through the comparison among the current calculated by Power Cable Simulator, EMTP and Cabsim with measured current.