A power flow schedule of a cluster is determined by calculating sensitivity of the net power exchange bounds. Each cluster includes a different section of the power system. The cluster provides to another cluster the power flow schedule and the net power exchange bounds for determination of a second power flow schedule by another cluster based on collective net power exchange bounds, a forecast power supply of the plurality of clusters, and a forecast power demand schedule. The clusters are hierarchically arranged such that the another cluster is higher in a hierarchy than the cluster. The cluster receives from the another cluster the second power flow schedule. The first power flow schedule is adjusted locally within the cluster based on the second power schedule and the net power exchange bounds of the cluster. The power output of the cluster is controlled using the adjusted first power flow schedule.