A modified method has been evolved to form the loss coefficients of an electrical power system network by decoupling load and generation and thereby creating additional ficticious load buses. The system losses are then calculated and co-ordinated to arrive at an optimum scheduling of generation using the standard co-ordination (λ iteration) equation. The method presented is superior to the ones currently available, in that it is applicable to a multimachine system with random variation of load and it accounts for limits in plant generations and line losses. The precise nature of results and the economy in the cost of energy production obtained by this method is quantified and presented.