PRIVATE INVESTMENT IN POWER AND DEVIATIONS FROM THE LEAST-COST EXPANSION PLAN

Established least cost electric generation expansion planning philosop hy is now coming under serious pressure because of the worldwide restr ucturing of the electricity supply industry. This restructuring usuall y includes private investment in power projects. Despite the importanc e of the long-term optimal strategy, the 'next' least cost project may , sometimes, be unattractive to private investors for a various reason s, but system planners may be constrained, by policy or financial pres sures, to accept compromises. The paper examines this problem, develop s techniques for assessing the impact of such deviations, examines aff ects on prices, and suggests trade-off methods for resolving economic and tariff related conflicts of interest.