Due to fast economic growth on the island of Taiwan, load demand in Taiwan Power Company (TPC) has been rapidly increasing in the past ten years and is expected to continue throughout the next decade. By 1995, the peak load demand in Taiwan is forecasted to reach 16,000 MW, an increase of 60% from the present level of 10,000 MW. Several new generating units have been under construction to meet the future demand. As a result, additional transmission lines are needed to avoid overloads on present lines. The objective of this paper is to report the results from a recent study which was aimed at reaching an optimal transmission expansion plan by comparing the relative merits of three feasible alternatives: EHV lines (345 KV), UHV lines (765 KV), and HVDC lines (± 250 KV). At present, the main factors considered in transmission expansion planning in TPC are the maximum power transfer limits, fault currents, transient stability, system losses, and cost [1]. In addition to these factors used in current practice, oscillatory stability of the power system under each expansion plan will be extensively studied. In particular, the low frequency electromechanical oscillations which tend to appear in a longitudinal power system such as the one in Taiwan will be investigated. The dampings of these oscillation modes are essential in system operation and planning, especially in the case when the transmission line is heavily loaded.