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In this paper, Proportional Integral Derivative with Filter (PIDF) is proposed for Automatic Generation Control (AGC) of a multi-area power system in deregulated environment. Initially, a two area four units thermal system without any physical constraints is considered and the gains of the PIDF controller are optimized employing Differential Evolution (DE) algorithm using ITAE criterion. The superiority of proposed DE optimized PIDF controller over Fuzzy Logic controller is demonstrated. Then, to further improve the system performance, an Interline Power Flow Controller (IPFC) is placed in the tie-line and Redox Flow Batteries (RFB) is considered in the first area and the controller parameters are tuned. Additionally, to get an accurate insight of the AGC problem, important physical constraints such as Time Delay (TD) and Generation Rate Constraints (GRC) are considered and the controller parameters are retuned. The performance of proposed controller is evaluated under different operating conditions that take place in a deregulated power market. Further, the proposed approach is extended to a two area six units hydro thermal system. Finally, sensitivity analysis is performed by varying the system parameters and operating load conditions from their nominal values.