A method for controlling an electrical power system connected to a power grid includes receiving a reactive power command and a measured reactive power and generating a reactive power error signal based on a difference between the reactive power command and the measured reactive power. Further, the method includes receiving, via a reactive power regulator, the reactive power error signal. Moreover, the method includes generating, via the reactive power regulator, a voltage command based on the error signal. The method also includes generating, via a droop control, a voltage droop signal. In addition, the method includes generating a voltage error signal as a function of the voltage droop signal and at least one of the voltage command or a measured terminal voltage. Thus, the method further includes generating, via a voltage regulator, a reactive current command based on the voltage error signal.