Performance engineers face the major challenge in modeling and simulation for the after-market power system due to system degradation and measurement errors. Currently, the majority in power generation industries utilizes the deterministic data matching method to calibrate the model and cascade system degradation, which causes significant calibration uncertainty and also the risk of providing performance guarantees. In this research work, a maximum-likelihood based simultaneous data reconciliation and model calibration (SDRMC) is used for power system modeling and simulation. By replacing the current deterministic data matching with SDRMC one can reduce the calibration uncertainty and mitigate the error propagation to the performance simulation. A modeling and simulation environment for a complex power system with certain degradation has been developed. In this environment multiple data sets are imported when carrying out simultaneous data reconciliation and model calibration. Calibration uncertainties are estimated through error analyses and populated to performance simulation by using principle of error propagation. System degradation is then quantified by performance comparison between the calibrated model and its expected new & clean status. To mitigate smearing effects caused by gross errors, gross error detection (GED) is carried out in two stages. The first stage is a screening stage, in which serious gross errors are eliminated in advance. The GED techniques used in the screening stage are based on multivariate data analysis (MDA), including multivariate data visualization and principle component analysis (PCA). Subtle gross errors are treated at the second stage, in which the serial bias compensation or robust M-estimator is engaged. To achieve a better efficiency in the combined scheme of the least squares based data reconciliation and the GED technique based on hypotheses testing, the Levenberg-Marquardt (LM) algorithm is utilized as the optimizer. To reduce the computation time and stabilize the problem solving for a complex power system such as a combined cycle power plant, meta-modeling using the response surface equation (RSE) and system/process decomposition are incorporated with the simultaneous scheme of SDRMC. The goal of this research work is to reduce the calibration uncertainties and, thus, the risks of providing performance guarantees arisen from uncertainties in performance simulation.