This paper applies a very efficient new technique, multi‐pass dynamic programming (MPDP) combined with successive approximations, to solve the weekly thermal unit commitment and hydrothermal generation scheduling problem. Conceptually, dynamic programming is suited for solving this problem, but the long computing time and the large storage memory required become unacceptable for large power systems and long scheduling periods. The MPDP technique can overcome these difficulties. Furthermore, the unit start‐up cost and pumped storage plants are considered in the hydrothermal coordination instead of only the production cost as in the previous application. The algorithm is tested on Taipower system with forty thermal units, seven conventional hydro units and one pumped storage plant. The results show that this method is suitable for practical systems.