In this paper, an effective approach, based on the transient energy fu
nction (TEF) method of transient stability analysis, is proposed for s
tability constrained rescheduling of the generation and critical line
flows for a given initial operating condition and designated contingen
cy. In the proposed approach, the sensitivities of the energy margin w
ith respect to changes in generation are used in the transient stabili
ty constraints, and distribution factors are used to monitor and const
rain the critical line flows. The problem is formulated as a multiobje
ctive optimization problem. A goal programming algorithm that incorpor
ates an explicit knowledge base is used to solve the optimization prob
lem. There are three objectives when the generation is rescheduled. 1)
Energy margin is changed to the specific value which indicates the de
sired stability index of the system. 2) Critical line flows achieve th
e desired values as closely as possible. 3) Changes in generation are
minimal. The proposed approach has been successfully tested on two pow
er systems: a 17-generator and a 50-generator test networks.