The paper deals with some aspects of automatic generation control of the two-area hydrothermal system provided with classical controllers. A comprehensive procedure for continuous-and discrete-mode optimisation of integral controllers using an integral squared error criterion is suggested. Investigations reveal that the optimal integral gains achieved through continuous-mode analysis are totally unacceptable in the discrete mode for the sampling periods used in practice. Moreover, for all practical purposes, the optimum integral gains in the discrete mode can be achieved by neglecting the generation rate constraints from the mathematical model, in contrast to the case in the continuous mode. Analysis also highlights significant differences in the dynamic performance of the hydrothermal system due to step-load perturbation in either of the areas. An attempt is also made to recommend an optimum sampling period.