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The present work proposes a teaching−learning-based optimization (TLBO)-tuned fuzzy proportional-integral-derivative (PID) controller of two-area hydro-thermal generating units for automatic generation control (AGC). The proposed system takes into account the physical constraints such as transport delay (TD), generation rate constraint (GRC), and governor dead band (GDB) nonlinearities. Firstly, fuzzy PID controllers were designed for both the areas and their gains were optimized using various minimization objective function criteria. Furthermore, applications of flexible alternating current transmission system (FACTS) devices such as static synchronous series compensator (SSSC), thyristor-controlled series capacitor (TCSC), thyristor-controlled phase shifter (TCPS), and unified power flow controller (UPFC) were investigated by integrating FACTS devices in appropriate locations of the system. The simulation results revealed that the minimum objective values were attained when the UPFC was placed in the system. Lastly, robustness analysis was done to observe the capability of the proposed controller with UPFC by changing system parameters and considering random load disturbances.