Peak/off-peak spreads in European electricity spot markets are eroding due to the nuclear phaseout and the recent growth in photovoltaic capacity. The reduced profitability of peak/off-peak arbitrage forces hydropower producers to participate in the reserve markets. We propose a two-layer stochastic programming framework for the optimal operation of a multi-reservoir hydropower plant which sells energy on both the spot and the reserve markets. The backbone of this approach is a combination of decomposition and decision rule techniques. Numerical experiments demonstrate its effectiveness.