This paper presents optimal scheduling of a gridconnected microgrid with grid, solar PV system, and wind energy system acting as sources and a local water reservoir actingas a storage system. Using mathematical models of solar PV, wind energy system, load profile, and pumped storage system, the optimization problem is formulated to minimize thedaily operating cost taking into account all the constraints. Using a modified linear programming algorithm based on varying price weight, an optimum schedule is obtained and the minimum operating cost is determined.Comparison of operating cost is carried out based on all possible combinations of available sources and storage system. Cases of maximum initial reservoir volume and minimum initial reservoir volume were considered for each combination of sources and storage system. Finally, by analyzing the simulation results and cost calculations, share of different renewable energy sources, grid, and storage system in meeting the load isobtained