A new model for distribution substation locating and sizing based on the life cycle cost（LCC） of equipment is developed. The initial investment， operation and maintenance cost， fault cost， disposal cost of substation superior power grids， lower power distribution networks and transformer equipment are considered in the new model. The ideal scheme is determined by the minimum LCC， coordinating reliability and economy. The fault cost calculation model of the distribution network is built， which reflects the comprehensive effect of the frequency， duration and quantity of outage on the fault cost. A new algorithm based on the improved stochastic multi-particle swarm optimization algorithm is presented. With the global searching capability of the new algorithm enhanced， the new model has proved feasible and practical by a planning project.