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This paper deals with the dispatch of power networks under mixed pool/bilateral trading. The major questions that are examined are the following: (1) To what degree does the relative level of pool versus bilateral trading influence performance in terms of individual power levels, costs, prices, and revenues? (2) What is the comparative performance of mixed trading with firm and nonfirm bilateral contracts under various curtailment strategies? (3) Is the revenue derived from the pool and bilateral trading consistent with the corresponding unbundled costs? The above questions are sequentially addressed in separate parts of this three-part paper. The eventual goal of these results is to help generator and load-serving entities choose appropriate relative levels of pool versus bilateral trades while considering risk, economic performance, and physical constraints. In Part II, two types of bilateral contracts, firm and nonfirm, are introduced together with their respective curtailment and noncurtailment bids. The optimal power-flow problem from Part I is now modified to accommodate this new type of operation. Technical and economical performance measures defined in Part I, namely, generation revenues from bilateral and pool sales, pool demand payments, plus generation and load expenditures to cover transmission loss and congestion management attributed to bilateral exchanges are also used here together with revenues from contract curtailment and expenditures due to noncurtailment bidding. Simulation results illustrate the effects of firm and nonfirm contracts and their bidding strategies on the relative levels of pool/bilateral trading, as well as on economic performance of market participants.