When an AC power system is subjected to sudden When an AC power system is subjected to load disturbance, load changes, system frequency will be considerably disturbed the system frequency may be considerably perturbed from the and becomes oscillatory. This is predominant in an operating frequency. The deviation of frequency oscillation interconnected power system. In this paper a new controller is that exceeds the normal limit directly interrupts the operation designed to regulate the tie-line power regulation through HVDC of power system. The frequency oscillation may experience link in parallel with the existing AC-AC link for stabilizing the serious stability problems usually in the form of low frequency frequency oscillation of AC System. The technique of oscillation due to in-sufficient system damping.Overlapping Decomposition and Eigen value assignment are The conventional LFC system is not very well suited to a applied for the design of power modulation controller. The linear deregulated energy market. HVDC connection will cause model of AC-DC link is developed and the system responses to increased operational strain. An alternative secondary control various load changes are studied with the help of Mat-Lab system can be introduced in which special power station are simulation. The study shows that the proposed controller is not selected to follow the HVDC load automatically while the rest only effective in damping out the frequency oscillation but is also of the system deviation are handled by conventional (LFC) capable of eliminating the transient frequency swing caused by method. large load distribution.In this paper the advantages of power modulation control by Keyword -High Voltage Direct Current Link (HVDC-link), AC-HVDC link to enhance the system damping is used which also DC Interconnected Power system, Stabilization of frequency extends to stabilize frequency oscillation in AC system. The oscillation, Overlapping, Decomposition, Eigen Value Assignment proposed controller is also used in coordination with Method, Load Frequency Control (LFC). conventional governor control for greater efficiency. [7] 1-4244-0726-5/06/$20.OO '2006 IEEE