A challenging aspect of applying stochastic programming in a dynamic setting is to construct a set of discrete scenarios that well represents multivariate stochastic processes for uncertain parameters. Often this is done by generating a scenario tree using a statistical procedure and then reducing its size while maintaining its statistical properties. In this paper, we test a new scenario reduction heuristic in the context of long-term power generation expansion planning. We generate two different sets of scenarios for future electricity demands and fuel prices by statistical extrapolation of long-term historical trends. The cardinality of the first set is controlled by employing increasing length time periods in a tree structure while that of the second set is limited by its lattice structure with periods of equal length. Nevertheless, some method of scenario thinning is necessary to achieve manageable solution times. To mitigate the computational complexity of the widely-used forward selection heuristic for scenario reduction, we customize a new heuristic scenario reduction method named forward selection in wait-and-see clusters (FSWC) for this application. In this method, we first cluster the scenarios based on their wait-and-see solutions and then apply fast forward selection within clusters. Numerical results for a twenty year generation expansion planning case study indicate substantial computational savings to achieve similar solutions as those obtained by forward selection alone.