The Substations are pivotal components in the electrical power transmission and distribution network, and are highly susceptible to various transient impulse, such as lightning strikes. Traditional simulation models of substations often fail to capture the intricate electromagnetic interactions under lightning strikes. A hybrid PEEC-MTL method was introduced in this paper. The PEEC method accurately models short transmission lines by capturing inductive and capacitive effects, while the MTL method provides a detailed representation of transformer windings by treating them as coupled transmission lines. Together, these methods ensure precise simulation of voltage and current distributions during transient events. The PEEC-MTL model offers valuable insights into the substation’s response to electromagnetic phenomena, aiding in designing more resilient power systems, and providing a robust tool for enhancing substation reliability and safety. The substation with two grounding grids, including separated and connected scenarios, was analyzed. The injected lightning current followed a standard Heidler waveform. The simulation results indicated that the connection of grounding grids significantly reduces the voltage levels, enhancing the stability and safety of the electrical system.