Hedging rule policies are designed to rationally allocate water resources over time. Previous study have addressed fundamental questions on hedging rules for reservoir operations including when, how much and how long to hedge. This study applies the theoretical findings of hedging policies to Lake Okeechobee in south-central Florida to explore the potential of hedging rule policies for the operation of the reservoir. Lake Okeechobee is located in major water supply source to agricultural and urban users and the Everglades National Park in the southern Florida. The Lake also contributes to flood control, navigation, recreation, and fish and wildlife protection. Extensive studies, including those on hedging rules, have been conducted for the Lake. Water Supply and Environment (WSE) regulation, approved by the U.S. Army Corps of Engineers (USACE) and the Sothern Florida Water Management District (SFWMD) since July, 2000 is currently used to balance the different, usually competing objectives. Most recently the revised Tentatively Selected Plan (TSP) that is planned for implementation for a three-year period beginning in late summer of 2007. Compared to WSE, TSP, a daily-based regulation schedule with new bands, new release magnitudes, and new forecasting indices, is believed to be more effective in decreasing the risk to public health and safety, reducing damaging events and salinity violations to the estuaries, and increasing critical flexibility in the operation of the reservoir. Our study adopts an optimization model that maximizes water supply utility while, setting the regulation on flood control and environmental protection defined in WSP and TSP as "hard constraints". We will first review the existing hedging rules used in WSP and TSP. To be realistic, this study attempts to improve the hedging rules within the operational context of WSE and TSP, rather than fully changing those schedules. It is expected to discover new knowledge that could help to improve reservoir operation in the real world.