The paper addresses the problem of multicriteria reconfiguration of distribution network with distributed generation according to the criterion of minimum power loss under normal conditions and the criterion of power supply reliability under postemergency conditions. Efficient heuristic and multicriteria methods are used to solve the problem including advanced ant colony algorithm for minimum loss reconfiguration of distribution network, the sorting‐out algorithm of cell formation for island performing in postemergency network, and the successive concessions method for multicriteria decision making. Demonstration studies have been carried out for the Central Power System of Mongolia.