Monitoring/control infrastructures are often assumed to be fully reliable in power system reliability studies. However, recent investigations on blackouts have revealed the crucial impacts of monitoring/control system malfunctions. This paper addresses the impact of situational awareness and controllability on power system reliability assessment. A methodology is proposed to simulate a situation in which a limitation of either or both monitoring and control functions could spread the consequence of power system events throughout the grid. It is assumed that the monitoring/control infrastructure is based on a wide-area measurement system (WAMS). While the proposed methodology is applicable to a variety of strategies for grid operations, certain assumptions are made for the simulation purposes. The Monte Carlo simulation is applied and a scenario reduction technique is considered for overcoming computational burdens. The performance of the proposed approach is simulated and analyzed on 9-bus and the IEEE 57-bus systems.