This paper is concerned with the optimal operation of reservoirs for electric generation. It reports several tests carried out on a simple system under special conditions highlighting some important characteristics of their optimal behavior. The tests were carried out in a progressive way in order to make clear the influence of several factors including water head, discount rate, inflow seasonality and system design. The main conclusions have been verified on an actual large scale system, which demonstrated the conservative nature of the optimal operation of reservoirs and the different roles they play according to their relative position in the cascade. The conclusions address the issue of adequately modelling the long term hydrothermal scheduling problem. The results suggest that the assumption of parallel operation of reservoirs, implicit in composite reservoir models and some simulation heuristics, could be a modelling over-simplification.6311011107