This paper introduces a novel double-loop control (DLC) method that seamlessly integrates sliding mode control (SMC) and internal model control (IMC) to effectively mitigate chaotic behavior in power systems. Initially, a sophisticated seven-dimensional chaos model featuring energy storage (ES) and static var compensation (SVC) is meticulously developed. Employing the 0–1 test, local bifurcation analysis, and phase diagrams, this model accurately detects and analyzes chaotic dynamics, demonstrating that variations in load reactive power can transition the system state from period-doubling to chaotic motion. Subsequently, building on the foundational α-order inverse model principle, the paper strategically pseudo-linearizes the controlled power system model to facilitate the meticulous construction of the IMC-loop. By integrating this IMC-loop with an SMC-loop, which incorporates a carefully designed relay function reaching law, a DLC method is devised. Applied to both ES and SVC, this method combines the substantial benefits of SMC and IMC, significantly curbing chaos and reducing chattering, as robustly confirmed by simulation.