Abstract In this study, the planning problem concerned with simultaneous placement of distribution generation (DG) and capacitor bank in the distribution network is investigated from a local distribution company's (DISCO's) viewpoint based on minimum total cost over the planning period and applying genetic algorithm (GA). The cost terms of the objective function include risk cost of load not supplied of the customers, cost of energy loss of the system, investment costs for purchasing the DGs and capacitor banks, and maintenance costs of the installed DGs and capacitor banks. Herein, the customers’ load types including residential, commercial, and industrial are modeled in the planning problem and load model-based power flow is applied instead of the conventional power flow. In addition, the failure rate of the distribution feeder is modeled respect with magnitude of the current flowing through the feeder applying several mathematical functions such as linear, power, exponential, and logarithmic. Moreover, in order to achieve realistic results, economic factors such as inflation and interest rates and technical factors including yearly load growth, hourly variations of the load, and daily variations of the load are taken into consideration in the planning problem.