A generation company (GENCO) which has a conventional power plant (CPP) intends to add an energy storage system (ESS) beside the CPP to increase its flexibility and profitability. For this purpose, a new model is proposed for coordinated operation planning of the CPP and ESS in energy and spinning reserve markets in the presence of a bilateral contract. The proposed model is based on the stochastic price based unit commitment (PBUC) and price based storage commitment (PBSC). The uncertainties of the energy and spinning reserve prices and delivery requests in the spinning reserve market are modeled via scenarios based upon historical data. The proposed model maximizes the profitability of the ESS beside the CPP and encourages the GENCO to invest the ESS. ESS technology options to use beside the CPP are determined by economic assessments. Numerical results show that utilization of ESSs improves the technical operation of CPPs, as well as GENCOs’ profitability.