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In restructured power systems undergoing deregulation, both system reliability and security have been gaining more attention because of the severe market competition and cost based reserve management. The maximum profit-driven strategy from all market participants has put system operation at risk. This paper formulates the AC OPF problem for the simultaneous dispatch of energy, spinning reserve and interruptible load. A new probabilistic reserve criterion based on system inherent reliability data is proposed to accurately assess the required system reserve and is implemented in a day-ahead market settlement. Interruptible loads, spinning reserve, system generation and demand have been considered in the development of the probabilistic reserve criterion. The RBTS has been analyzed to illustrate the proposed techniques.