Pump and turbine operations lead to head losses in the tailrace channel. Pumping discharge may be limited due to potential air entrainment into the pump shaft when the downstream reservoir is at its lowest level and the head losses are too high. Regarding turbine operations, the limit is given by the maximum level in the Pelton turbine chamber due to high water level in the downstream reservoir and head losses. The rapid starting and stopping of turbines and pumps lead to highly unsteady flow in the tailrace channel system of the two connected hydropower plants. Negative and positive surges may lead to similar consequences as for stationary operations such as sudden air entrainment into the pump shaft and submerging of the Pelton runner under operation. Therefore, flow and head losses test were conducted on a physical model at 1:30 scale together with numerical simulations using FLOW-3D. On-site measurement of the existing power plant allows validating the results. Representative and extreme operational scenarios have been simulated; the main results are discussed and presented.