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This paper is on the problem of short-term hydro scheduling, particularly concerning head-dependent reservoirs under competitive environment. We propose a method, based on nonlinear programming, for optimizing power generation efficiency. The proposed method considers not only that the hydroelectric power generation is a function of the water discharge and of the head, but also that the maximum power generation is head-dependent. Numerical results based on a realistic cascaded hydro system illustrate the proficiency of the proposed method.