The main objective of this paper is to describe a multilevel framework that facilitates seamless integration of existing state estimators (SEs) that are designed to function at different levels of modeling hierarchy in order to accomplish very large-scale monitoring of interconnected power systems. This has been a major challenge for decades as power systems grew pretty much independently in different areas, which had to operate in an interconnected and synchronized fashion. The paper initially provides a brief historical perspective which also explains the existing state estimation paradigm. This is followed by a review of the recent technological and regulatory drivers that are responsible for the new developments in the energy management functions. The paper then shows that a common theoretical framework can be used to implement a hierarchical scheme by which even very large-scale power systems can be efficiently and accurately monitored. This is illustrated for substation level, transmission system level as well as for a level between different transmission system operators in a given power system. Finally, the paper describes the use and benefits of phasor measurements when incorporated at these different levels of the proposed infrastructure. Numerical examples are included to illustrate performance of the proposed multilevel schemes.