We present a method for designing distributed generation and demand control schemes for secondary frequency regulation in power networks such that asymptotic stability and an economically optimal power allocation can be guaranteed. A dissipativity condition is imposed on net power supply variables to provide stability guarantees. Furthermore, economic optimality is achieved by explicit decentralized steady state conditions on the generation and controllable demand. We discuss how various classes of dynamics used in recent studies fit within our framework and give examples of higher order generation and controllable demand dynamics that can be included within our analysis. We also discuss how the dissipativity condition imposed can be easily verified for linear systems by solving an appropriate LMI. Our results are illustrated with simulations on the IEEE 68 bus system which demonstrate that the inclusion of controllable loads offer improved transient behavior and that an optimal power allocation among controllable loads is achieved.