Power systems reliability has been one of the judgment criteria for the quality of these systems for many years. With regard to technology growth in the recent decades and increase in sensitivity of the customers to unavailability of the electric energy, reliability issue has achieved more importance and plays an outstanding role in power systems design, operation, management and planning. According to statistical studies done by the relevant utilities, about 80 percent of the customer interruptions are caused by failures occurrence in distribution systems and the remaining 20 percent are due to the generation and transmission parts of a power system. Investment costs in power plants and transmission system with the aim of achieving a certain level of power system reliability are typically much greater than the costs needed for the distribution system to achieve the same reliability level. Hence, distribution system reliability analysis is an efficient way to improve the power system reliability. That’s why a lot of power system reliability researches published in the recent years have focused on the reliability issue in distribution systems. On the other hand, market liberalization in electric power industry has raised the importance of cost and/or reliability evaluation of distribution systems. Variation of electric energy and interruption costs in different load conditions, as a function of time, can be useful in electric power pricing, system operation and management that is based on system reliability requirements. The methods for calculation of distribution reliability indices can be A sensitivity analysis has performed by increasing the alternative supply capacity and its impact on the interruption duration of the feeders and whole of the system are considered. A reliability saturation concept has also been introduced to determine the capacities corresponding to the upper limits of the feeders and system reliability. Having calculated various indices of the reliability zones, they are ranked with a criterion of their expected interruption duration at each hour and whole of a typical day. This ranking can be used in distribution system optimal operation and management. Keywords: 1- Distribution System, 2- Reliability Zone, 3- Time-Varying Load, 4- Alternative