JEE_V5_N4_RP1 T. Anilkumar Dr.N.Venkataramana Journal on Electrical Engineering 2230 – 7176 5 4 1 10 AGC, Deregulated Power system, Load Frequency Control (LFC), Optimal output feedback control, optimal full order observer, HVDC link, Ancillary service, Linear Quadratic Regulator This paper presents a reduced order observer solve load frequency control problem in a three-area deregulated environment when interconnected with HVDC link. The performance of the proposed method is compared with optimal state feedback controller. This proposed control strategy can estimate measurable state variables as well as it gives good dynamic response as a controller. April - June 2012 Copyright © 2012 i-manager publications. All rights reserved. i-manager Publications http://www.imanagerpublications.com/Article.aspx?ArticleId=1856