Phasor Measurement Units (PMUs) have made possible the set up of Wide-Area Monitoring, Protection, and Control (WAMPAC) systems as the energy management infrastructure under critical situations in the modern electrical market. In this paper, a new optimal PMU placement using Mixed-Integer Linear Programming (MILP), which improves the power system observability besides minimizing the PMUs installation cost, is proposed. Also, a systematic method is introduced in order to apply the effect of zero injection buses and power flow measurements as two vogue conventional measurements. The effect of branch outage and PMU loss as effective contingencies on system observability is studied in the absence and presence of conventional measurements. The proposed method is examined on three known IEEE test systems and Azarbayjan 40-bus system. The results have shown that the method improves the power system observability.