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The coevolutionary algorithm (CEA) based on the Lagrangian method is proposed for hydrothermal generation scheduling. The main purpose of hydrothermal generation scheduling is to minimize the overall operation cost and the constraints satisfied by scheduling the power outputs of all hydro and thermal units under study periods, given electrical load and limited water resource. In the proposed method, a genetic algorithm is successfully incorporated into the Lagrangian method. The genetic algorithm searches out the optimum using multiple-path techniques and possesses the ability to deal with continuous and discrete variables. Regardless of the objective function characteristic the genetic algorithm does not have to modify the design rules and possesses the ability to go over local solutions toward the global optimal solution. The genetic algorithm can improve the disadvantages of the traditional Lagrangian method, which updates Lagrange multipliers according to the degree of system constraint violation by the gradient algorithm, and further searches out the global optimal solution. The developed algorithm is illustrated and tested on a practical Taiwan power system. Numerical results show that the proposed CEA based on the Lagrangian method is a very effective method for searching out the global optimal solution.