A diagnostic system in operable communication with an electrical distribution circuit and configured to detect a stator winding fault in an AC electrical machine comprising a plurality of stator windings, the diagnostic system comprising: a processor programmed to: receive measurements of three-phase voltages and currents provided to the AC electrical machine, the measurements being received from voltage and current sensors associated with the electrical distribution circuit; compute positive, negative and zero sequence components of voltage and current from the three-phase voltages and currents; and calculate a fault severity index based on at least a portion of the positive, negative and zero sequence components of voltage and current, wherein calculating the FSI comprises: identifying a voltage gain in one or more phases of the AC electrical machine due to a resistance based fault, the voltage gain comprising a gain in a stator fault negative sequence voltage, wherein identifying the resistance-based fault comprises classifying the resistance-based fault as a high resistance fault between the input and output of the electrical distribution circuit if a voltage drop is detected, and classifying the resistance-based fault as a stator fault in the stator windings if a voltage gain is detected; and localizing the stator winding fault to one or more phases in the AC electrical machine. a processor programmed to: receive measurements of three-phase voltages and currents provided to the AC electrical machine, the measurements being received from voltage and current sensors associated with the electrical distribution circuit; compute positive, negative and zero sequence components of voltage and current from the three-phase voltages and currents; and calculate a fault severity index based on at least a portion of the positive, negative and zero sequence components of voltage and current, wherein calculating the FSI comprises: identifying a voltage gain in one or more phases of the AC electrical machine due to a resistance based fault, the voltage gain comprising a gain in a stator fault negative sequence voltage, wherein identifying the resistance-based fault comprises classifying the resistance-based fault as a high resistance fault between the input and output of the electrical distribution circuit if a voltage drop is detected, and classifying the resistance-based fault as a stator fault in the stator windings if a voltage gain is detected; and localizing the stator winding fault to one or more phases in the AC electrical machine. receive measurements of three-phase voltages and currents provided to the AC electrical machine, the measurements being received from voltage and current sensors associated with the electrical distribution circuit; compute positive, negative and zero sequence components of voltage and current from the three-phase voltages and currents; and calculate a fault severity index based on at least a portion of the positive, negative and zero sequence components of voltage and current, wherein calculating the FSI comprises: identifying a voltage gain in one or more phases of the AC electrical machine due to a resistance based fault, the voltage gain comprising a gain in a stator fault negative sequence voltage, wherein identifying the resistance-based fault comprises classifying the resistance-based fault as a high resistance fault between the input and output of the electrical distribution circuit if a voltage drop is detected, and classifying the resistance-based fault as a stator fault in the stator windings if a voltage gain is detected; and localizing the stator winding fault to one or more phases in the AC electrical machine. identifying a voltage gain in one or more phases of the AC electrical machine due to a resistance based fault, the voltage gain comprising a gain in a stator fault negative sequence voltage, wherein identifying the resistance-based fault comprises classifying the resistance-based fault as a high resistance fault between the input and output of the electrical distribution circuit if a voltage drop is detected, and classifying the resistance-based fault as a stator fault in the stator windings if a voltage gain is detected; and localizing the stator winding fault to one or more phases in the AC electrical machine.