Power generation from river hydropower plants depends mainly on river flow. Water fluctuations in the river make the yield process unpredictable. To reduce these fluctuations, building a small reservoir at the river flow of the hydropower plant is recommended. Conventionally, classic single-pond models are commonly used to design run-of-river hydropower plants. However, such models are associated with fluctuations, sagging, and irregular power fluctuations that lead to irregular water fluctuations. This research proposes a novel idea to replace the single-pond model with a three-pond model to increase the plant’s overall efficiency. The three-pond model is developed as a three-tank nonlinear hydraulic system that contains the same amount of water as a conventional single pond. It also has the advantage of minimizing the run-of-river power plant’s dependence on river flow and increasing efficiency by trapping swell and turbulence in the water. To further increase the efficiency, the developed model was tested for smooth and effective level control using fuzzy control.