Hydropeaking affects downstream ecosystems and water uses. We assessed the effect of small re-regulation reservoirs (RRR) located downstream of hydropower plants to mitigate the impact of hydropeaking operations, in terms of the tradeoffs between flashiness of flows and power system cost. The study is performed on a hypothetical power system composed by one reservoir hydropower plant, one coal-fired plant, one diesel-fired plant, and one wind power plant. Hourly operations within a weekly horizon by each plant are prescribed by a system-wide cost-minimization model. Operations are constrained by minimum flows (MIF) and maximum ramping rates (MRR). The model was run for selected weeks, representative of the four seasons and three water year types. Results show that MIF and MRR constraints can achieve improvements in the flashiness of flows, from Richard-Baker index above 0.8 down to less than 0.1. However, without a RRR, these constraints can cause a power system cost increase of up to 70% with respect to the unconstrained case. The strongest effect on power system costs is observed under the dry hydrologic scenario. The cost increase is also significant in the summer weeks of the two normal scenarios. A half-hour capacity RRR keeps the cost increase below 8% and further reduces the flashiness to values below 0.1, on average for the dry scenarios. RRR storage capacities of one and 2 h can further reduce the cost increase below 5%, with flashiness as low as 0.01. No significant improvement is observed beyond this RRR size. In synthesis, this study shows that small re-regulation reservoirs, with capacities up to 2-h detention time, are a promising alternative for hydropeaking control at low power system cost.