This paper discusses the environmental and utility planning implications of load (i.e. 'variable') and non-load (i.e. 'core') loss reduction options in the case of a mixed hydro-thermal power system from a long-term electricity generation expansion planning perspective. A key finding of the study is that a reduction of electricity losses in transmission and distribution need not always reduce emissions of air pollutants; and that neither loss reduction option is consistently superior over time from the environmental perspective. For a given level of loss reduction, long-run average cost of electricity generation with the variable loss reduction option was found to be less than that with the core loss reduction option.