We present a new methodology for obtaining optimum values of the integrated cost of utility investment with customer interruption in distribution planning for electric power systems by determining the reliability cost and worth of the distribution system. Reliability cost refers to investment cost of the utility in achieving a defined level of reliability. Reliability worth is the benefit gained by the utility consumer from an increase of reliability. ll computer program has been developed to determine comparative reliability indices for a typical distribution network. With the average interruption cost, outage duration, average disconnected load, cost data for distribution equipment, etc. being known, the relation between reliability cost, reliability worth and reliability at the specified load point are obtained. The optimum reliability of the distribution system is then determined from the minimum cost to the utility with customer interruption. The applicability of this approach is demonstrated by several practical networks.