This paper presents studies of the dynamic performance of a hydro-thermal power system under the effect of governor deadband nonlinearity. The describing function approach is utilized to handle the nonlinearity beside a linearized state space model for the rest of the system. A new dodel is developed for the load frequency control problem of a two-area hydro-thermal power system comprised of thermal and hydro plant which differ widely in their characteristics. The optimal and decentralized control approaches are applied to control the behaviour of the system. It is found that the principal effects of speed governor backlash nonlinearity produce more oscillations in area frequency deviation. Also, it is observed that the proposed control techniques improves system response and succeeded in stabilizing the system.