Plug it into the AC outlet and turn it on. Then use a bare paperclip to temporarily (say 1 second or so) short the reen wire to one of the neighboring black wires.
The fan should be enough load for the PSU.
Keep in mind that this is a no load test and that there is no guarantee that the PSU will work under load. But if the fan does not spin up, the PSU is dead.
Your test method is correct, however, for the sake of safety, it's best to use a wire or paperclip to connect the green wire to the black BEFORE plugging the PSU into an AC outlet. Too, the PSU power switch, if it has one, should be OFF. Once the green to black connection has been made, plug into wall outlet (not power-strip - directly to wall) and turn on. The PSU fan should spin to indicate that it works.