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This paper proposes a backward search approach to incorporate excess stream inflows, in stochastic dynamic programming (SDP) based reservoir scheduling, of hydropower plants. The aim is to reduce the amount of spill during operation of the reservoir. Energy maximization type stochastic dynamic programming (SDP) model, with inflow process assumption considered as independent, is developed for a hydropower plant located in Japan. Reservoir operating policy consists of target storage levels at the end of a period, for each combination of beginning of the period storage levels and possible average inflow states during the period. The backward search approach has been incorporated in the SDP model, during the simulation, in order to identify the annual reservoir operation curve, with reduced spill. The storage guide curves identified with incorporation of backward search approach are compared with that from the normal SDP model. It has been found that the proposed approach serves better from the view point of spill reduction.