This paper explores the control and operational aspects of introducing fuel cell/electrolyzer/ultracapacitor (FC/ELZ/UC) unit into a microhydro power system, replacing the conventional electronic load controller/dump-load unit. FC/ELZ is expected to provide long-term energy balance by utilizing the hydrogen technology, whereas the UC is employed as buffer storage for the transient compensation. System configuration is proposed, control scheme is designed, and the detailed dynamic modeling is developed for each component of the system. Expected behaviors during the sudden load change and hydro input variation are observed by mathematical simulation. Finally, the results of the analysis are summarized with their applicability to real system and the limitation/further scope are indicated.