A procedure is proposed to determine where and when to increase the capacity of lines and transformers in a power subtransmission network. The expansion plan must minimize cost while supplying the demand for energy over a time horizon, keeping the quality and reliability standards of the network and minimizing the impact over the environment. The procedure is iterative and takes into account AC flows, reliability analysis, different scenarios, demand uncertainty, discrete investment costs, voltage constraints, capacity, and power factor. A significant contribution of this procedure is that, along with the expansion plan, it considers the optimization of the operation, specifically the movement of transformer taps and the location and sizing of reactive banks. This allows significantly reducing or delaying the investment, thus reducing its present value. The approach ensures convergence when computing the power flows and allows making an analysis of the effects of distributed generation and, if necessary, load curtailment. The model is tested on the power subtransmission network of the most important electric power distribution company in Chile, serving a city of 6 million people.