Demand response is becoming a promising field of study in operation and planning of restructured power systems. More attention has recently been paid to demand response programs. Customers can contribute to the operation of power sys-tems by deployment demand response. The growth of customers’ participation in such programs may affect the planning of power systems. Therefore, it seems necessary to consider the effects of demand response in planning approaches. In this paper, the impact of demand responsiveness on decision making in generation expansion planning is modeled. Avoidance or deferment in installation of new generating units is comprehensively investigated and evaluated by introducing a new simple index. The effects of demand responsiveness are studied from the points of view of both customers and generation companies. The pro-posed model has been applied to a modified IEEE 30-bus system and the results of the study are discussed. Simulation results show that reducing just 3%of the customers’ demand (due to price elasticity) may result in a benefit of about 10%for customers in the long term.