Controller design for U-tube-steam generator (UTSG) water level at low operating powers is addressed via a systematic design procedure. The Linear Quadratic Gaussian with Loop Transfer Recovery method is used to design compensators valid in the vicinity of various power levels, which are then scheduled using the primary loop ΔT to obtain a nonlinear controller applicable in the entire operating regime. The nominal UTSG models are obtained by numerical linearization of a plant-validated simulation code. The individual compensators are designed using the desired controller bandwidth as the only design freedom. Even though the individual compensator performance and robustness properties are guaranteed only in the linear domain, extensive computer simulations of the gain-scheduled controller indicate that a number of these properties are carried to the nonlinear domain, enhancing the performance and robustness of the water level controller. The controller is proposed for use as an alternative to manual control during low-power operation or as a backup controller when flow rate sensor failures necessitate the use of only the downcomer water level signal for feedback. Even though the results of this systematic controller design appear very encouraging, they are only preliminary, and additional work is warranted to resolve a number of digital controller implementation issues.