Availability Based Tariff (ABT) is a frequency linked pricing mechanism. It has been adopted in India since the year 2000 for unscheduled electrical power transactions. ABT encourages the rescheduling of participating generators in real time as per the prevailing load conditions. At present the generators reschedule manually with respect to the frequency price signals. This paper presents a model for automatic frequency control using deviation settlement mechanism. The above model has been tested on an isolated area system having four generators using MATLAB/Simulink. The paper also covers the new CERC (Central Electricity Regulatory Commission) notification 132 dated 6th Jan 2014 as per which, if the deviation of the power generated from the schedule is more than 12 per cent (Over injection/Under injection), the corresponding deviation price will be zero and hence the generation will be brought back to the scheduled generation.