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This paper proposes a novel control strategy for coordinated operation of networked microgrids (MGs) in a distribution system. The distribution network operator (DNO) and each MG are considered as distinct entities with individual objectives to minimize the operation costs. It is assumed that both the dispatchable and nondispatchable distributed generators (DGs) exist in the networked MGs. In order to achieve the equilibrium among all entities and take into account the uncertainties of DG outputs, we formulate the problem as a stochastic bi-level problem with the DNO in the upper level and MGs in the lower level. Each level consists of two stages. The first stage is to determine base generation setpoints based on the load and nondispatchable DG output forecasts and the second stage is to adjust the generation outputs based on the realized scenarios. A scenario reduction method is applied to enhance a tradeoff between the accuracy of the solution and the computational burden. Case studies of a distribution system with multiple MGs of different types demonstrate the effectiveness of the proposed methodology. The centralized control, deterministic formulation, and stochastic formulation are also compared. Index Terms-Distributed generator (DG), distribution network, mathematical program with complementarity constraints (MPCC), Microgrid (MG). NOMENCLATURE Sets SSet of scenarios. G Set of types of renewable energy source (RES)-based DGs (wind and solar in this paper) G = {WT, PV}. D/M Set of nodes in DNOs/MGs. Parameters m1Point of common coupling (PCC) of mth MG. r i Line resistance between nodes i and i + 1.Manuscript

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