Abstract This paper addresses optimal day-ahead scheduling of Combined Heat and Power (CHP) units of an Active Distribution Network (ADN) with Electric Storage Systems (ESS) and Thermal Storage Systems (TSS) considering Industrial Customers (ICs) inter-zonal power exchanges. The ADN operator may use CHP units to supply its ICs and based on smart grid conceptual model, it can transact electricity with upward wholesale electricity market and its downward ICs' systems; meanwhile its ICs can transact energy with each other through the ADN main grid. Basically, the optimal scheduling of CHP units problem is a Mixed Integer Non Linear Programing (MINLP) problem with many stochastic and deterministic variables. However, the electricity transactions between the ADN and its ICs in normal and contingency scenarios may highly complicate this problem. In this paper, linearization techniques are adopted to linearize equations and a two-stage Stochastic Mixed-Integer Linear Programming (SMILP) model is utilized to solve the problem. The first stage models behavior of operation parameters and minimizes the operation costs; check the feasibility of the ICs' requested firm and non-firm power exchanges, and the second stage considers the system's stochastic contingency scenarios. The competitiveness of ADN in the deregulated market can be improved by adjustment of the proposed decision variables in the two stage optimization procedure. The proposed method is applied to 18-bus, 33-bus IEEE test systems. The effectiveness of the proposed algorithm has been investigated.