Two closed-loop hierarchical control strategies are examined for the control of a two-area hydro-thermal power system model. The control is obtained using the interaction prediction approach and structural perturbation method. The first approach has been developed to provide optimal feedback control using an off-line decentralized calculation procedure. The second method is based on obtaining local feedback controllers for each subsystem on the first level by ignoring the interactions, then a global controller at the second level provides corrective signals to neutralize the interaction effects. In addition, the dynamic behaviour of the power system under the effect of non-linearities is also investigated. Finally, a two-area hydro-thermal power system is used to illustrate the approaches. © 1989 Taylor & Francis Group, LLC.