In this paper, an attempt is made to prepare an energy management model for Lucknow city along with policy recommendations for optimal energy utilization and management. At the outset, the authors have reviewed the related literature on energy management in the urban system. The entire collected literature is divided into the following sections, such as, energy resource assessment, energy consumption, energy and economy, energy and environment, energy and transportation, forecasting the energy demand and supply, alternate energy sources and technologies, energy conservation and demand-side management and energy management measures in India, and are reviewed thoroughly and presented. Subsequently, an attempt is made to establish the importance of energy in urban development by using Systems concept. Lucknow city has been chosen for investigation in this study. A detailed methodology is developed for organizing the survey at the grassroots level to evolve feasible strategies for optimal energy management in the study area. An attempt is further made to assess the available energy resource in the city, and the energy consumption by source wise in the city and estimating the energy gap in the year 2011. The paper concludes with preparation of a detailed energy management model for Lucknow city to reduce the expected energy gap for the year 2011. The recommendations are made for supply augmentation, demand-side management and policy measures to be taken by the government authorities.