The distribution system is normally the dominating part of the electrical power supply system. A considerable part of the potential for capital savings, reduced losses, enhanced reliability and improved environmental design may be gained by utilizing improved methods and advanced tools for planning, operation, maintenance and documentation of distribution systems. The paper describes a planning procedure to handle reliability not only as an important type of analysis but as an integrated part of the cost minimization problem. The reliability is described as an operating cost by evaluating cost of non-delivered power (NDP) and non-delivered energy (NDE). The reported case studies show that the economic assessment of reliability is of great importance in distribution system automation and design. © 1990 IEEE