  We present a systematic method for designing distributed generation and
demand control schemes for secondary frequency regulation in power networks
such that stability and an economically optimal power allocation can be
guaranteed. A dissipativity condition is imposed on net power supply variables
to provide stability guarantees. Furthermore, economic optimality is achieved
by explicit decentralized steady state conditions on the generation and
controllable demand. We discuss how various classes of dynamics used in recent
studies fit within our framework and give examples of higher order generation
and controllable demand dynamics that can be included within our analysis. In
case of linear dynamics, we discuss how the proposed dissipativity condition
can be efficiently verified using an appropriate linear matrix inequality.
Moreover, it is shown how the addition of a suitable observer layer can relax
the requirement for demand measurements in the employed controller. The
efficiency and practicality of the proposed results are demonstrated with a
simulation on the Northeast Power Coordinating Council (NPCC) 140-bus system.
