Over the past 10 years, the use of distributed generation (DG) has become one of the important directions in the development of the electric power industry in many countries across the world. According to its purpose, DG is used to supply remote electricity consumers. In conditions of market uncertainty in the development of the energy sector, one of the most profitable solutions for increasing the reliability of consumer power supply is to install a small-scale generation near the distant loads. Under such option the risks of energy shortage and loss of power supply from power source of the main network are reduced, reliability of power supply is improved, the energy quality parameters are improved, power and energy losses are reduced. However, the growth of the DG penetration in electric power systems (EPS) has not only positive aspects, but also creates certain technical problems that are associated with fluctuations of EPS parameters as well as with DG controllability under normal and emergency conditions. These problems can be solved but at the cost of more complex EPS dispatch and automatic control. The solution requires new mathematical models to substantiate the development of EPS and power supply systems, to analyze and to manage their state. In this article the authors propose a novel mathematical model for DG planning and optimization basing on integral quality criterion that incorporates power supply quality and reliability.