How to consider reliability aspects in the energy management of the Brazilian hydro dominated system

System expansion in Brazil has been historically planned considering a deterministic criterion based on an energy deficit risk equal to 5%, associated to unfavorable hydrological conditions. This criterion is adopted independently of the economic impact (deficit cost) of the energy rationing. This paper proposes new expansion planning procedures for hydro dominated systems. The proposed methodology incorporates aspects related to costs of the deficit and the energy not supplied associated to energetic and electric reliability, respectively. The methodology is illustrated considering a configuration of the Brazilian interconnected system for 2004. Results are presented and discussed.