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Measurement placement design of electric power system is formulated as an optimization problem, whose objective is to minimize the installation cost under the constraint that the system remains observable for pre-selected single branch outage or any single measurement loss. The contribution of this paper is as follows: We consider both costs on remote terminal units (RTUs) and measurement devices. Furthermore, a two-step heuristic approach based on topological analysis is proposed to solve the problem. In the first step a measurement configuration with minimum number of measurements that satisfies the observability constraints is determined. In the second step the measurement configuration is further optimized to reduce the number of RTUs. Tests on the IEEE 30-Bus system are used to demonstrate the validity and efficiency of the proposed approach.

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