This paper presents the automatic generation control (AGC) strategy in restructured environment. Two area isolated power system with Area1 has thermal - hydro power plants with two DISCOs and area2 having thermal – thermal power plant with two DISCOs. DISCO participation matrix (DPM) has been used for the visualization of bilateral contract by distribution companies (DISCOs). Price based operation of power system in bilateral contract with load variations during peak hour and off peak hour schedule has been simulated for 24 hours under the availability based (ABT) three part tariff mechanism. Unscheduled interchange (UI) charges of ABT has been calculated against frequency deviations, play an important role for regulating the frequency. Charges of peak hours are high as compared to peak hours. Distributed Generation as Electrical vehicles have been examined to control load frequency. The results reduction in tie line error, frequency deviations, changes in power deviations and UI charges against frequency with changes in the load has been represented. From the recent literature in the area of load frequency control there is lot of research future to work in the area of distributed energy source for the price based load frequency control. It would like to represent that worldwide, electrical vehicle as a distributed generation is highly demanded

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