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This paper presents equivalent load method for the calculation of reliability indices of electric power generating svstems. In this method each unit model is viewed as a load model with state capacities represented by negative load values, and sequentially combined with the load model. The probability and frequency of each load level are obtained after each combination. At the end an equivalent load model is obtained which yields the indices for various margins. This method is suitable for multistate representation of generating units and hourly load data or load data defined over any other suitable time interval and is easy for computer programing. In this method it is not necessary to set up a system capacity model, so it greatly simplifies the conventional method but retains the same accuracy. The utilization of the proposed method is illustrated by a simple numerical example. The proposed method is applied to the IEEE-RTS (IEEE Reliability Test System) and several reliability indices are calculated and compared with those obtained by other methods.