In this paper, the analysis of Load Frequency Control (LFC) of a two area bilateral market structure has been done by considering reheat and non-reheat turbine. The dynamic response of each area and tie line under different operating conditions (including contract violation) is presented. Particle Swarm Optimization (PSO) which is a metaheuristic and population based evolutionary algorithm is used to tune the conventional Proportional Integral (PI) controller by minimizing the Integral Square Error (ISE) and the same is compared with conventional PI controller for the above system. The response of the proposed PSO tuned PI controller is found to be better than the PI controller. The simulation is implemented in MATLAB-Simulink. © Research India Publications.