The increasing load demand in power system affects the grid frequency stability. When such disturbance occurs, the generator governing system (GOV) performs the primary control to regain the stability, but due to its droop characteristic, the frequency is brought to a new steady-steady. An Automatic Generation Control (AGC) is the secondary control loop which plays a pivotal role in power system to assist the governing system to recover and maintain the system frequency stability following a disturbance while also maintaining the tie-line power interchange. This paper explores a number of benefits provided by the Automatic Generation Control in power system through critical analysis of the implemented PID based AGC control scheme. The control scheme is modelled through DIgSILENT Power Factory simulation software. A modified IEEE 14 bus network is used for validation of the control scheme through various case study implementations. The simulation results prove that the AGC consolidated with a governing are able to maintain the power system stability under various contingencies.