| Sumario: | The usefulness of mathematical programming models in assisting to solve capacity expansion problems in the electric power sector has increasingly been demonstrated. To date, however, little emphasis has been placed upon using the capabilities of these same models to investigate questions of economic and public policy concern that inevitably are associated with the issue of capacity expansion. This paper illustrates how one mathemathical optimization technique, namely mixed integer programming, can be applied to the expansion problem of a specific electric utility, namely the Saskatchewan Power Corporation, to examine the cost and supply consequences of excluding from consideration particular investment alternatives possessing undesirable externalities and of employing policies which successfully reduce demand growth or smooth the variability of power demand.
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