Major strategic planning decisions loom as society aims to balance energy security, economic development and environmental protection. To achieve such balance, decisions involving the so-called water-energy nexus must necessarily embrace a regional multi-power plant perspective. We present here the Thermoelectric Power & Thermal Pollution Model (TP2M), a simulation model that simultaneously quantifies thermal pollution of rivers and estimates efficiency losses in electricity generation as a result of fluctuating intake temperatures and river flows typically encountered across the temperate zone. We demonstrate the model's theoretical framework by carrying out sensitivity tests based on energy, physical and environmental settings. We simulate a series of five thermoelectric plants aligned along a hypothetical river, where we find that warm ambient temperatures, acting both as a physical constraint and as a trigger for regulatory limits on plant operations directly reduce electricity generation. As expected, environmental regulation aimed at reducing thermal loads at a single plant reduces power production at that plant, but ironically can improve the net electricity output from multiple plants when they are optimally co-managed. On the technology management side, high efficiency can be achieved through the use of natural gas combined cycle plants, which can raise the overall efficiency of the aging population of plants, including that of coal. Tradeoff analysis clearly shows the benefit of attaining such high efficiencies, in terms of both limiting thermal loads that preserve ecosystem services and increasing electricity production that benefits economic development.