A reliable electric power supply system is a predictable pre-requisite for the technological,rnpolitical and economic growth of any nation. This is a reaction of an increasingly electricityrndependent society, which demands electricity supplies at acceptable quality levels and atrnreasonable tariffs. Power interruption becomes a serious problem in Ethiopia. This is because ofrnthe very high outage frequency and very long time service restoration. Due to this problem, day tornday activities of the society are highly affected and hence they are strongly complaining the electricrnutility. Power interruption significantly costs both sides, the utility and the customer.rnThis research has been conducted a studies on powers system reliability assessment andrnimprovement with a case study in Jimma town distribution system. Customers has complainedrnsoundly about power interruptions in the city. The reliability assessment has been done on 15kVrncity feeder to assess the performance of the present system and also predictive reliability analysisrnfor the future. The interruption data of years 2010-2015 has been used as a base year. The studyrnhas evaluated different mitigation alternatives to improve the system reliability at reasonable cost.rnMany alternatives has been assessed using heuristic method and the alternative with low SAIDI,rnSAIFI and EENS at a reasonable cost has been selected.rnIn general, this thesis work reveals that the reliability of the system has been improved significantlyrnby implementing reliability improvement solutions that are justified economically. Even if thernuncertainty of the input data is taken into account, SAIFI has been reduced by 84.75 % asrncompared with the average reliability indices values of the system in the base years. In the samerncase SAIDI and EENS have been decreased by 85 % and 88.651 % respectively.rnThe proposed solution has been saved 579523.96 ETB per year from the unsold energy of onernfeeder only with 2.03 years payback period investment. Satisfaction of the society has beenrnconsidered as a priceless advantage.