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The objective of this paper is to study the effect of Demand Response (DR) in the optimal spinning reserve scheduling process. A probabilistic method is proposed which considers the probabilistic nature of contingencies and the value that customers consider for their electricity consumption continuity. The method does not use any pre defined external reliability index constraint or risk proxy as the criteria and considers interruption cost explicitly in the objective function. In this paper also the effect of single and double outage consideration in the interruption cost and its effect on DR utilization have been analyzed. The method has been tested on a 7 unit test case and the numerical results have been presented.