Unit Commitment and Economic Dispatch (UCED) with combined cycle (CC) units and AC power flow is an important problem to be solved by ISOs. The problem is difficult because of complicated transitions in CC units and highly non-linear AC power flows. Currently, to solve the problem, transitions among CC states are simplified and AC power flow is approximated with DC power flow. However, the resulting solution may not be consistent with actual operations of power systems. In this paper, a more operational approach of modeling UCED with CC units and AC power flow is developed. Under the frequently used assumption of low network resistance, AC power flow is represented as a monotonic function. Then, the original problem is solved by exploiting the monotonicity through the novel dynamic linearization technique and separability after relaxing coupling system-wide demand constraints. The complexity of resulting subproblems is drastically reduced and linearity is efficiently exploited by using branch-and-cut. Subproblem solutions are efficiently coordinated by our recently developed surrogate Lagrangian relaxation and convergence is guaranteed. Based on a 30-bus system, numerical results demonstrate the new approach is more computationally efficient as compared to Benders decomposition.