The risk of water flow compensation caused by the additional discharge of leading hydropower station has increased the difficulty of multi entity cascade hydropower optimal operation, and the backwater jacking effect of downstream hydropower stations has further increased the complexity of the model. Therefore, non-linear modeling is carried out for the flow compensation process of leading hydropower station, and the risk of flow compensation in the compensation period and the recharge period is quantified. At the same time, the impact of backwater jacking effect of downstream hydropower stations on the tail water level of leading hydropower station is considered, and then a scheduling model with the goal of maximizing the joint operation revenue of cascade hydropower stations is constructed. The analysis of the example shows that the method can more reasonably distribute the benefits between the upstream and downstream hydropower stations in the cascade basin, coordinate the conflicts of interests among the multi entity cascade hydropower stations, and improve the activity of the hydropower stations at all levels in participating in the market scheduling.