This paper presents an optimal economic dispatch for power plants by using modified particle swarm optimization (PSO) algorithm. The economic dispatch problem in power systems is to determine the optimal combination of power outputs for all generating units in order that the total fuel cost can be minimized, furthermore, all practical constraints can be satisfied. Several key factors in terms of valve-point effects of coal cost functions, unit operation constraints and power balance are considered in the computation models. Consequently, a new adaptive PSO technique is utilized for solving economic dispatch problems. The proposed algorithm is compared with other PSO algorithms. Simulation results show that the proposed method is feasible and efficient.