This paper presents a linear programming model of the Quebec and New York State power systems which includes a detailed description of the different types of exchange power transactions that could take place in the future between these two regions. The model is used to simulate, for a given demand and fuel price scenario, the long term impact of a development of power exchanges between the two systems over a 45 year horizon. Detailed results are given on the types and amounts of new investments in both regions, the dividends derived from exchanges, and the marginal electricity costs.