This paper presents a novel algorithm for determining the optimal operation of a cogeneration plant with back-pressure and extraction-condensing turbine/generators. The proposed algorithm determines the optimum load of boilers and turbine/generators, using only one parameter, the steam mass flow rate, which can be obtained directly from on-line measurement during plant operation. The proposed algorithm consists of the non -linear operating cost function, and its correlated constraints. Furthermore, it has been successfully applied to an actual industrial cogeneration plant, with satisfactory results. Comparison of these results with actual operating data has revealed that using the proposed algorithm results in at least 1.2~4.5[%] operating cost saving, depending on the process steam load. Furthermore the proposed algorithm can be easily installed in a process control computer because the required input data can be easily obtained from information available on-line.n-line.