A large dam model is the object of study of this paper. The parameters L
lower and L
upper define its lower and upper levels,
L = L
upper - L
lower is large, and if the current level of water is between these bounds, the dam is assumed to be in a normal state. Passage across one or other of the levels leads to damage. Let J
1 and J
2 denote the damage costs of crossing the lower and, respectively, the upper levels. It is assumed that the input stream of water is described by a Poisson process, while the output stream is state dependent. Let L
t
denote the dam level at time t, and let p
1 = lim
t→∞P{L
t
= L
lower} and p
2 = lim
t→∞P{L
t
> L
upper} exist. The long-run average cost,
J = p
1
J
1 + p
2
J
2, is a performance measure. The aim of the paper is to choose the parameter controlling the output stream so as to minimize J.