This research is a Cooperative effort between Professor Peter B. Luh, University of Connecticut and Professor Tsu-Shaun Chang, University of California, ECS-8717235, and addresses the interrelationship that exists in large-scale power systems between planning and operational activities. This area, termed the generalized scheduling problem, is emerging as a highly important topic as system complexity increases. This investigation views the problem from the perspective of hierarchial decomposition and coordination. While the conceptual framework is quite general, actual development of optimization techniques for large-scale systems is problem dependent. This work focuses on the hydro short-term scheduling and pre-dispatch problem as background for applying the new techniques.