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In this paper, the dynamical response of the load frequency control problem in an interconnected power system is improved with a pragmatic viewpoint. In practice, access to all the state variables of system is not possible and also their measurements are not feasible. Usually only a reduced number of state variables or linear combinations thereof, are available. To resolve this difficulty, in this paper optimal output feedback method is proposed which uses only the measurable state variables. The optimal control is determined by minimizing a performance index under the proposed output feedback conditions. The effectiveness of the method is demonstrated on the two equal area interconnected thermal power system. The results indicate that the proposed controller exhibits better performance. In fact, the control system designed on this method satisfies the load frequency control requirements with a reasonable dynamic response. The proposed method has several desirable properties such as good sensitivity and robustness behavior.