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This paper presents a new method for the decentralized solution of the Security Constrained Optimal Power Flow (SCOPF) problem in large interconnected power systems. The method decomposes the overall SCOPF problem of a multi- area system into independent SCOPF sub-problems, one for each area. The solutions of the SCOPF sub-problems of the different areas are coordinated through a pricing mechanism until they converge to a reduced scope central SCOPF solution. The prices used for the coordination of the sub-problem solutions are the prices of electricity exchanges between adjacent areas. The reduced scope SCOPF of a multi-area power system is a SCOPF with a reduced set of security constraints, in which the effects of contingencies outside an area on monitored elements within the area are ignored. Test results from the application of the method to the IEEE 3-area RTS-96 and to the Balkan power system are presented.