Unlike the traditional policy, Generation Expansion Planning (GEP) problem in competitive framework is complicated. In the new policy, each Generation Company (GENCO) decides to invest in such a way that obtains as much profit as possible. This paper presents a new hybrid algorithm to determine GEP in a Pool market. The proposed algorithm is divided in two programming levels: master and slave. In the master level a Modified Game Theory (MGT) is proposed to evaluate the contrast of GENCOs by the Independent System Operator (ISO). In the slave level, a Particle Swarm Optimization (PSO) method is used to find the best solution of each GENCO for decision making of investment
