The short-range hydrothermal power scheduling problem is set as a problem in optimal control theory. New methods of modeling the upper- and lower-bound con straints on the reservoir capacity are proposed. The general equations that the optimal control satisfies are derived in the form of a constrained 2-point boundary-value problem (TPBVP). Properties of the optimal water usage policy are derived analytically and verified by simulation using the System 360 Continuous Systems Modeling Program.