With the increasing rate of power consumption, many new distribution systems need to be constructed to accommodate connecting new consumers to the power grid. On the other hand, the increasing penetration of renewable distributed generation (DG) resources into the distribution systems and the significance of their optimal placement in the network can dramatically change the problem of distribution system planning and design. In this paper, the problem of optimal distribution system planning including conductor sizing, DG placement, alongside with placement and sizing of shunt capacitors is studied. The objective of the problem is to minimize the system's cost. Load growth rate, cost of energy, cost of power, and inflation rate are taken into account. A new Binary-Selective Particle Swarm Optimization (PSO) approach which is capable of handling all types of continuous, binary and selective variables, is proposed to solve the optimization problem of distribution system planning. The efficacy of the proposed method is tested on a 26-bus distribution system.