This paper outlines a framework for performing intelligent sensor validation for a diagnostic expert system while reasoning under uncertainty. The emphasis is on the algorithmic preprocess technique. A companion paper focusses on heuristic post-processing. Sensor validation plays a vital role in the ability of the overall system to correctly detemine the state of a plant monitored by imperfect sensors. Especially, several theoretical developments were made in understanding uncertain sensory data in statistical aspect. Uncertain information in sensory values is represented through probability assignments on three discrete states, "high", "normal", and "low", and additional sensor confidence measures in Algorithmic Sv.Upper and lower warning limits are generated from the historical learning sets, which represents the borderlines for heat rate degradation generated in the Algorithmic SV initiates a historic data base for better reference in future use. All the information generated in the Algorithmic SV initiate a session to differentiate the sensor fault from the process fault and to make an inference on the system performance. This framework for a diagnostic expert system with sensor validation and reasonig under uncertainty applies in HEATXPRT$^{TM}$, a data-driven on-line expert system for diagnosing heat rate degradation problems in fossil power plants.