The increasing complexity and difficulty of the Automatic generation control (AGC) problem has resulted from the increasing scale of interconnected power networks and changing daily demands. The primary goals of AGC are to control frequency variations at nominal levels and tie-line power variances at planned levels. To effectively deal with AGC control difficulties, this study introduces Discrete Optimal Quadratic Automatic Generation Control (OQAGC). One advantages of this method is the differentiation of quadratic cost function results into linear terms while minimizing control actions and minimizing state deviations. This developed control method leads to a simple and easy discrete control law that can be implemented for both linear and nonlinear systems. For optimizing the controller, this research work utilized an optimum control theorem using Lagrangian multipliers, while the functional minimization technique is used for systematically selecting the state and control weighting matrices in discrete form for N control regions (where N is the number of interconnected power systems). The discrete cost function needs are derived using this technique in terms of area control errors, integral area control errors, and control energy expenditure. Four interconnected power systems were analyzed with/without disturbances and area control errors, each with one thermal, hydro, and gas-generating unit. A two-area multi-source power system with renewable energy in control area 2 is analyzed for the performance of the proposed controller with generation rate constraints (GRCs). The functional minimization technique simplifies and eases the choosing of weighting matrices. Furthermore, the simulation findings suggest that the developed discrete optimum quadratic AGC control-based cost functional minimization approach enhances power system dynamics in terms of stability, steady-state performance, and the closed-loop control system's robustness to input load disturbances. As a result, the newly developed OQAGC approach demonstrates the significance of the discrete LQR controller for N multi-area power systems.