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This paper discusses application of mathematical programming decomposition techniques in a model for planning least-cost investments in generating capacity subject to reliability constraints. The planning problem is decomposed into a set of subproblems, each representing theoperation of a set of generating units of fixed capacity in one year, and a master problem, representing optimal generating capacity investments over the entire planning horizon. The subproblems are solved using the probabilistic simulation procedure. The master problem is a linear program which uses Lagrange multipliers derived from the sub- problems. The solution is found by iteratively solving the master problem and the subproblems.