Abstract: This study presents a solution procedure using particle swarm optimization to solve the Hydrothermal coordination problem for power generation considering Prohibited Operating Zones (POZ). Prohibited Operating Zones (POZ) induce nonlinear characteristics into the problem, dividing the operating region into various non-convex sub regions. This non convexity affects the performance of any algorithm to perform well. PSO is used as base algorithm to search for a better solution. The PSO algorithm is enhanced by the introduction of Craziness function to effectively search for a better quality solution. In addition power balance, water discharge, reservoir volume and ramp limits are considered.