The efficient protection of electric power distribution networks against lightning discharges is a crucial problem for distribution electric utilities. To solve this problem, the great challenge is to find a solution for the installation of surge arresters at specific points in the electrical grid and in a sufficient quantity that can ensure an adequate level of equipment protection and be within the utility’s budget. As a solution to this problem of using ATP (Alternative Transient Program), this paper presents a methodology for optimized surge arrester allocation based on genetic algorithm (GA), with a fitness function that maximizes the number of protected equipment according to the financial availability for investment in surge arresters. As ATP may demand too much processing time when running large distribution grids, an innovative procedure is implemented to obtain an overvoltage severity description of the grid and select only the most critical electric nodes for the incidence of lightning discharges, in the GA allocation procedure. The results obtained for the IEEE-123 bus electric feeder indicate a great reduction of flashover occurrence, thus increasing the equipment protection level.