The emergence of competitive power market makes dispatch algorithm with transient stability constraints increasingly important for the transparent power system operation. Heuristic and off-line evaluation for the operation point can produce a discrimination among market players in the deregulated power system. In this paper, a dispatch algorithm with transient stability constraints is proposed. Energy margin under the TEF(Transient Energy Function) structure is adopted as a measure for the stability index. Implementation issues and simulation results are discussed in the context of a 10-bus system