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A power distribution system reconfiguration methodology considering the reliability and the power loss is developed in this paper. Probabilistic reliability models are used in order to evaluate the reliability at the load points. An algorithm for finding the minimal cut sets is utilized to find the minimal set of components appearing between the feeder and any particular load point. The optimal status of the switches in order to maximize the reliability and minimize the real power loss is found by a binary particle swarm optimization-based search algorithm. The effectiveness of the proposed methodology is demonstrated on a 33-bus and a 123-bus radial distribution system.