This article presents optimal automatic generation control regulator designs considering different methods of designing state cost-weighting matrix “Q.” The various aspects of observability and controllability of the system states, which influence the system dynamics directly or indirectly, are incorporated in the design of optimal automatic generation control regulators. For the investigation, a two-area interconnected power system with identical plants consisting of non-reheat turbines is considered. An AC transmission line in parallel a with DC transmission link is taken as area interconnection. The full state feedback control strategy has been applied to get optimal gains of the automatic generation control regulators. The pattern of closed-loop system eigenvalues, optimal gains, and system dynamic response plots in the wake of load disturbance are achieved with the implementation of the different optimal automatic generation control regulators to analyze the system stability and its dynamic performance.