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Power system deregulating has changed the mechanism of system reliability management. This paper presents a technique used for the reliability evaluation of deregulated distribution systems considering priority of load curtailment using reliability network equivalent techniques. A reliability model for each market player in a deregulated power system is introduced in which a generation company is represented by an equivalent multistate generation provider (EMGP) and the transmission system is represented by an equivalent multistate transmission provider (EMTP). A Genco, which has reserve agreements with other Gencos, is represented by an equivalent multistate generation provider with reserve agreement (EMGPWR). This paper has provided a new approach in determining the interrupt value during the transmission contingency for each customer. Optimal power flow (OPF) is used to replace AC power flow to check network constraints in each contingency state. Reserve agreements between suppliers are considered to improve reliability indices. A reliability test system (RBTS) has been analyzed to illustrate the technique.