Electric utilities are enforced to control trustworthily total lifetime costs caused by their network components without jeopardizing the reliability and security of the network. New distribution planning methods and procedures are needed in order to meet the expectations and performance targets of regulators, company owners, and customers in the re‐regulated environment. One of the most challenging tasks for electrical utilities is the consideration of reliability as a part of long term planning of the network. In order to respond to these requirements, an advanced IT‐solution has been created, which provides reliability analysis as a part of the network planning process. The software implementation and the developed models for reliability analysis are presented briefly in the paper. The focus of the proposed paper deals with studies in which alternative network solutions are evaluated using the developed application. For each alternative the total lifetime costs are calculated, including reliability costs. The optimal plan depends on the selection of reliability optimization criteria: the reliability costs may consist only of direct utility costs, but they can also include customer interruption costs and even the costs of voltage dips. The paper presents and evaluates results of example studies and discusses the correlation between the utility strategy and optimal network structure. Copyright © 2006 John Wiley & Sons, Ltd.