This paper addresses a new decentralized robust LFC design in a deregulated power system under bilateralbased Policy scheme. The LFC Problem is formulated to a PI based multi-objective control problem via a mixed H2/H ∞ control technique. The robust PI control problem is reduced to a static output feedback control synthesis, and it is solved using a developed iterative linear matrix inequalities algorithm to get a robust performance index close to specified optimal one. The proposed method is applied to a 3-control area power system with possible contract scenarios and a wide range of load changes. The results are compared with H2/H ∞ dynamic control design.