- This paper addresses the problem of maximizing capacity utilization of the battery power source in a portable electronic system under latency and loss rate constraints. First, a detailed stochastic model of a power-managed, batterypowered electronic system is presented. The model, which is based on the theories of continuous-time Markovian decision processes and stochastic networks, captures two important characteristics of today’s rechargeable battery cells, i.e., the current rate-capacity characteristic and the relaxation-induced capacity recovery. Next, the battery-aware dynamic power management problem is formulated as a policy optimization problem and solved exactly by using a linear programming approach. Experimental results show that the proposed method outperforms existing methods by more than 20% in terms of battery service lifetime.