The sizing of components in any reticulation scheme usually follows previous experience and trends. This paper develops an algorithm which finds the optimal sizing of cables, transformers and substations to yield an overall optimal reticulation system for a residential area. An optimal system is defined as one which satisfies all the engineering requirements, and also yields a minimum cost over its operating lifetime. Attention is paid to such considerations as the locations of high voltage and medium voltage substations, and of secondary low voltage distribution points, their individual power ratings and voltage levels; a radial or a ring distribution network, aluminium or copper cables, and their routes; load growth and reliability. Several case studies are presented and compared with the cost of an actual practical design based on current conservative practice in South Africa. The results show that the theoretically optimum design could lead to as much as a 25% saving in the lifetime costs of the reticulation scheme.