The future of the electric grid requires advanced control technologies to reliably integrate high level of renewable generation and residential and small commercial distributed energy resources (DERs). Flexible loads are known as a vital component of future power systems with the potential to boost the overall system efficiency. Recent work has expanded the role of flexible and controllable energy resources, such as energy storage and dispatchable demand, to regulate power imbalances and stabilize grid frequency. This leads to the DER aggregators to develop concepts such as the virtual energy storage system (VESS). VESSs aggregate the flexible loads and energy resources and dispatch them akin to a grid-scale battery to provide flexibility to the system operator. Since the level of flexibility from aggregated DERs is uncertain and time varying, the VESSs' dispatch can be challenging. To optimally dispatch uncertain, energy-constrained reserves, model predictive control offers a viable tool to develop an appropriate trade-off between closed-loop performance and robustness of the dispatch. To improve the system operation, flexible VESSs can be formulated probabilistically and can be realized with chance-constrained model predictive control. The large-scale deployment of flexible loads needs to carefully consider the existing regulation schemes in power systems, i.e., generator droop control. In this work first, we investigate the complex nature of system-wide frequency stability from time-delays in actuation of dispatchable loads. Then, we studied the robustness and performance trade-offs in receding horizon control with uncertain energy resources. The uncertainty studied herein is associated with estimating the capacity of and the estimated state of charge from an aggregation of DERs. The concept of uncertain flexible resources in markets leads to maximizing capacity bids or control authority which leads to dynamic capacity saturation (DCS) of flexible resources. We show there exists a sensitive trade-off between robustness of the optimized dispatch and closed-loop system performance and sacrificing some robustness in the dispatch of the uncertain energy capacity can significantly improve system performance. We proposed and formulated a risk-based chance constrained MPC (RB-CC-MPC) to co-optimize the operational risk of prematurely saturating the virtual energy storage system against deviating generators from their scheduled set-point. On a fast minutely timescale, the RB-CC-MPC coordinates energy-constrained virtual resources to minimize unscheduled participation of ramp-rate limited generators for balancing variability from renewable generation, while taking into account grid conditions. We show under the proposed method it is possible to improve the performance of the controller over conventional distributionally robust methods by more than 20%. Moreover, a hardware-in-the-loop (HIL) simulation of a cyber-physical system consisting of packetized energy management (PEM) enabled DERs, flexible VESSs and transmission grid is developed in this work. A predictive, energy-constrained dispatch of aggregated PEM-enabled DERs is formulated, implemented, and validated on the HIL cyber-physical platform. The experimental results demonstrate that the existing control schemes, such as AGC, dispatch VESSs without regard to their energy state, which leads to unexpected capacity saturation. By accounting for the energy states of VESSs, model-predictive control (MPC) can optimally dispatch conventional generators and VESSs to overcome disturbances while avoiding undesired capacity saturation. The results show the improvement in dynamics by using MPC over conventional AGC and droop for a system with energy-constrained resources.