This paper presents a novel refined bacterial foraging algorithm (RBFA) to solve a multi-objective optimal power dispatch (MOOPD) problem incorporating multiline flexible AC transmission system (FACTS) devices in modern power systems and to seek optimal parameters of the same. This paper also deals with the concept of the interline power flow controller (IPFC) for providing better power flow management in a multiline transmission system. The optimal control parameters thus obtained are used to enhance the stability of the system and minimize transmission losses. The stability of modern power systems is improved by installing fast reacting devices such as IPFC together with the optimal parameters of IPFC. The optimal location of IPFC and solving optimal power dispatch (OPD) problems are required to employ the introduction of multi-objective based optimization techniques. This paper proposes a new algorithm based on the bacterial foraging algorithm (BFA) with a proposed multi-objective optimization technique. The proposed approach is tested with standard IEEE 30 bus system and comprehensive simulation results show better in constraint handling, finding optimal control parameters of IPFC, handling of voltage profile, minimize the transmission losses and quality of solution.