The power system reformation changes the power market operation mode and deeply influences on the planning and operation of the power supply company. Under this circumstacne, the new planning requirement from the reformation is analyzed, and a bilevel distribution network planning model is established by considering DG and ILR under the environment of deregulated retailer market. The objective of upper level is to minimize the cost of investment and maximize power supply reliability and power quality. While the lower level make optimally decision to the DG output and ILR in the operation stage of distribution network. Besides, the upper level model is the mixed integer nonlinear planning and the genetic algorithm is employed. The lower level model is continuous nonlinear planning and it is solved by utilizing the prime dual interior point method. Finally, a modified IEEE33 bus system is included to verify the proposed model. The income of power supply company is analyzed. It is shown that introducing the power sales side market competition into the lower level of distribution network planning can suit to the change of profit pattern.