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This paper investigates the stability and optimum settings of conventional automatic generation controllers for an interconnected power system having reheat steam plants. Effective application of the parameter-plane technique for obtaining optimal controller setting and sensitivity analysis has been demonstrated. Rigorous sensitivity analysis reveals that reserve of stability and optimum controller setting are sensitive to inertia constant, governor time constant, turbine time constant and reheat coefficient and barely sensitive to base load condition, synchronising coefficient and reheat time lag. The optimum controller setting, however, is hardly sensitive to the speed regulation parameter whereas reserve of stability is quite sensitive to it. A significant part of this paper highlights the condition for which it is possible to optimise the controller setting of an individual area, treating the rest of the system as having infinite inertia. Analysis reveals that a reheat system has a slower response, providing smaller generation rate and higher frequency and tie deviations when compared with a nonreheat system. Investigation reveals that in a reheat system the optimum controller setting achieved without considering generation rate constraint becomes unacceptable in the presence of generation rate constraint. Also, while accounting for generation rate constraint, a relatively large value of governor speed regulation parameter can be well acceptable without significantly affecting the quality of the system response.