The problem of power system planning, due to its complexity and dimensionality, is one of the most challenging problems facing the electric power industry in developing as well as developed countries. In planning phase, two of the most important decision-making parameters are the reliability and costs. The latter includes both system investment costs and outages costs. In this paper, these parameters are described and the interrelation between them is evaluated. Some previous approaches and developed techniques will he applied to a particular planning problem in a developing country and some aspects having a significant impact on the decision making process in the planning phase will be considered.