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In this paper, Proportional–Integral–Derivative controller with derivative Filter (PIDF) is proposed for Automatic Generation Control (AGC) problem of four area reheat thermal power systems under deregulated environment by considering the physical constraints such as Generation Rate Constraint (GRC) and Governor Dead Band (GDB) nonlinearity. The system is investigated in all possible scenarios under deregulated environment. The gains of the controllers are optimized using an Integral of Time multiplied by Absolute value of Error (ITAE) criterion employing of Firefly Algorithm (FA).The performance of some diverse classical controllers such as Integral (I), Proportional–Integral (PI) and PIDF controllers are compared under poolco based scenario. Simulation results reveal that the performance of the system is better with PIDF controller compared to others.