Electric ancillary service is an important method that ensures the power system to operate safely and stably. This paper discusses the optimum selection of Automatic Generation Control (AGC) units in the Electric AGC Ancillary Service Market. In this paper a mathematical model is proposed to select the generating unit to perform AGC function in light of minimizing the AGC services purchase fee. Several forms that are used to pay the AGC service business are also discussed in the paper. The application to a realistic system shows that the idea and the method presented in this paper are correct and feasible.