Optimal Control of a Dam Under Seasonal Electricity Prices

The economic use of reservoir water in the generation of hydroelectric power has already been the subject of numerous papers. It originated in Massé /4/ and was formalized by Little /3/ using the technique of dynamic programming. Further refinements appeared with Russell /6/, who introduced piecewise-linear costs. Rossman /5/ examined randomized policies in the case of release commitments and Chow and Maidment /2/ studied the problem of correlated inflows. Bogle and O’Sullivan /1/ suggested a special computational procedure when the probability density functions of the inflows are piecewise-linear.