In this paper, we describe the development of a distributed power flow and the economic operation for a power distribution system undergoing conversion to a strategic business unit (SBU) operation for the division of the power distribution business sectors in South Korea. The SBU is a selfregulated entity with independent responsibility for operating a local system within its budget. The financial results appear through independent, available financial sheets designed to motivate management innovation and cost saving curtailment. In the SBU, the distributed power flow algorithm in a power distribution system should be changed as the system is divided so that each sector then needs its own operational system. In this study, we developed a distributed power flow algorithm and the economic operation for a power distribution system undergoing SBUs after the division into power distribution business sectors in South Korea. Index Terms-Distributed power flow, Economic operation, SBU(strategic business unit), DEA(data envelopment analysis), KEPCO(Korea Electric Power Corporation)