Aimed at the least annual accounting fee and the highest reliability, a novel mathematical model for optimal expansion planning of the pumped-storage station is presented. The constraints of the model consist of two types, the conventional type involving system demand and reserve capability constraints, operation characteristic of the generation unit constraints, energy sources consumption of generation station constraints, reservoir capability and spare capability of pumped storage station constraints, etc. The other type includes pollution emission constraints, ramp rate of generation unit constraints, dynamic reserve capability constraints, etc. By simulating the production dispatch and dynamic process in the case of system fault and load variation, the static benefit and dynamic benefit can be obtained. The most desirable planning scheme of pumped-storage stations can be found from all possible schemes by comparing all indices. The case study of an actual provincial power system shows the practicability and feasibility of the method.