In this paper we present a new algorithm for computing reduced-order models of interconnect which utilizes the dominant controllable subspace of the system. The dominant controllable modes are computed via a new iterative Lyapunov equation solver, Vector ADI. This new algorithm is as inexpensive as Krylov subspace-based moment matching methods, and often produces a better approximation over a wide frequency range. A spiral inductor and a transmission line example show this new method can be much more accurate than moment matching via Arnoldi.