A two-stage power system distribution planning algorithm is developed for solving sizing, location and timing problems of distribution substations and primary feeders. This comprehensive algorithm involves an accurate small-area electric load forecasting procedure, and provides the flexibility for both static- and dynamic-planning application modes. Also, the algorithm includes a new nondiscrete planning model which accurately simulates the different cost functions of substations and primary feeders. Moreover, constaints on voltage drop, equipment capacity and power-conservation constraints are included in the planning problem formulation. Finally, the proposed algorithm is illustrated using a detailed numerical example, and subsequently tested for both efficiency and accuracy.