Reservoir management is inherently multicriterial, since any release decision involves implicit trade-offs between various conflicting objectives. The release decision reflects concerns such as flood protection, generation of hydroelectric power, dilution of wastewater and heated effluent, supply of municipal, agricultural and industrial water, maintenance of environmental standards and satisfaction of recreational needs. This paper presents a framework for analysing trade-offs between several decision criteria and includes the dilution of heated effluents from downstream thermoelectric power generation in an optimization model for reservoir management. The model is formulated and analysed in an interactive multicriteria decision-making (MCDM) modelling framework. Rather than providing specific target levels or ad hoc constants in a goal-programming framework as proposed elsewhere, this multicriteria framework suggests a systematic way of evaluating trade-offs by progressive preference assessment. The MCDM model, based on a Chebyshev metric and a contracted cone approach, is learning-oriented and permits a natural exploration of the decision space while maintaining non-dominated decisions. A detailed case study of the Shellmouth Reservoir in Manitoba, Canada serves as an illustration of the model. &