This paper presents a novel framework for the assessment of reliability and quality indices and the associated reserve levels in electric power systems. The developed technique takes into account the variations of demand and contingencies, which occur randomly, causing some units of generation, and/or transmission capacities to be lost. The evaluated reliability and quality measures, which are essential to assess the reserve capabilities of the power system for various operating scenarios, are probabilistic in nature. In fact, the value of demand levels, the capacity of the generation and transmission capacities are known with absolute certainty. The assessment of reliability and quality indices, in this paper, are subject to random variations and, consequently, as well as the calculated reliability indices are all subject to random variations where only expected values of these indices can be evaluated. This paper presents a novel assessment of the power system reserve-based on the reliability and quality levels. Practical applications are additionally exhibited, for demonstration purposes, to the Saudi electricity power networks.