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This paper develops a realistic model for short-term operation planning of a large scale hydrothermal power system with a high share of hydro. This problem is a large scale mixed integer program. Benders' method is employed to decompose the problem with respect to integer and continuous variables. The master problem of this method contains only integer variables and considers the unit commitment of thermal plants. The subproblem includes only continuous variables and considers the economic dispatch problem. The special structure of master and subproblems are further exploited which results in considerable reductions in the size of the problem and computation time requirement.