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In this paper we apply the time-scale separation design developed by Chakrabortty and Arcak (2007) for robust stabilization and performance recovery to power systems with unknown load power demands and unexpected line outages. We estimate the unknown over a fast time-scale using a high-gain filter and then employ this estimate to cancel the unknown so that over a slower time-scale the trajectories of the closed loop system approach those of the nominal system. We illustrate the effectiveness of the design in eliminating the possibilities of a Hopf bifurcation and subsequent voltage collapse in a single machine infinite bus (SMIB) power system. We then demonstrate the application of the design to fault recovery of a classical 9-bus system.