Customer-outage costs (COCs) are used to evaluate reliability of the generation-resource plan for a major power system in India, through development of an analytical reliability evaluation model, Extensive field surveys were conducted of different customer categories to examine inconveniences faced due to electricity interruptions. A composite outage cost function weighted across all customer categories in the region is estimated in a log-linear functional form. The inherent outage characteristics of existing and prospective generation resources under the country＇s capacity expansion program, the National Power Plan, are integrated with the COCs to obtain an interrupted energy value (IEV) which is a customer value-based generation-reliability index. The IEV for the plan is found to be Rupees (Rs,) 2.30 per kWh of electrical energy not served in 1990, The COG-based reliability-planning criterion provides an optimal level of reliability equivalent of 9.1% loss-of-load probability. Comparison of socially optimal reliability and expected implicit reliability level of the 1990-2000 generation-resource plan shows that the expansion program is unreliable in the earlier years but becomes over-reliable towards the latter years of the planning horizon. The study also illustrates that adaptive response investments which ameliorate the impact of interruptions in grid supply at a lower cost have substantially displaced potentially higher direct-outage costs.