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A method for optimal electric energy production of thermal-hydro power systems is presented in this paper. The electric energy produced by hydroelectric plants and coal-fired plants is divided into 4 components: potential energy, kinetic energy, water-deep pressure energy and reservoir energy. A new and important concept, reservoir energy, is proposed, based on which is divided into a number of water bodies, for example 3 water bodies, and a reservoir is analyzed in a new way. This paper presents a optimal scheduling solution of electric energy production of thermal-hydro power systems based on multi-factors analytic method, in which some important factors, such as load demand, reservoir in-flow, water-consumed volume increment rate of hydroelectric plants or converted from coal-fired plants, and so on are given to model the objective function and the constraints. A study example with three simulation cases is carried out to illustrate flexibility, adaptability, applicability of the proposed method.