The Bureau of Reclamation has undertaken a program to improve water resource management at its hydroelectric power plants. One feature of the resource optimization program involves the development of economic dispatch methods which will enable plant operators to meet power and water demands while increasing overall operating efficiency. The economic dispatch method described has been designed and simulated using a computer model of the Lower Colorado River Basin's hydraulic and electric power systems. Simulation results demonstrate that the economic dispatch method yields significant efficiency improvements with sufficient speed for practical application. >