In this work, we propose a simulation methodology that incorporates derating models of decoupling capacitors for power integrity analysis. The construction of the derating models of decoupling capacitors is based on the impedance measurement and curve fitting method. Three approaches of impedance measurement are compared and the most accurate one is selected to build the derating models. The curve fitting method converts the measured impedance into circuit models. A library file containing the derating models is generated such that it can be repeatedly used for different products at various design cycles. The derating library takes into account the operation conditions such as temperature and DC bias as well as the vendor information. The proposed simulation methodology with the derating library achieves high accuracy, which is demonstrated through correlations with measurements.