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In this paper, the modified subgradient algorithm based on feasible values (F-MSG) is applied to a security constrained economic dispatch (ED) problem. The proposed technique considers the upper and the lower generation limits of the generation units, the maximum transmission capability of the transmission lines, and the upper and the lower limits of bus voltage magnitudes. Application of the algorithm is demonstrated on a lossy electric power system that contains 14 buses and 5 thermal units. The same dispatch problem is also solved via MATPOWER® 3.2 dispatch software for comparison purpose. From the results, we see that the proposed technique give the same optimal total cost rate value as the one given by MATPOWER® 3.2 dispatch software.