The problem of optimizing the short-term operation of a multiplant cogeneration system in a large industrial complex is solved. A cogeneration system is defined as a system that simultaneously produces electric power (electricity) and thermal power (steam). The cogeneration system model includes both the electric and thermal systems. The electric system model includes generation and transmission. The thermal system model includes the individual plants which are comprised of boilers, turbines, condensers, deaerators, pumps, and storage tanks and the interconnecting steam network. The optimization problem has as its objective the minimization of the overall cost of all fuels and makeup water used during the scheduling horizon (1 to 24 hours), subject to satisfying a number of constraints on electric and steam systems. A novel solution approach is introduced which is based on coordinated optimization of the electric and thermal systems. A production-grade computer program has been developed and tested for a real industrial complex. The program is being integrated as part of the Energy Management System of the industrial complex where it is to be used as an operational scheduling tool. The technical approach is described and numerical results are reported.