Yes / This paper proposes a novel approach for the reliability cost-based optimization of Distribution Systems (DS), considering tie line-based network reconfiguration method with integration of Distributed Energy Resources (DER). An optimal Energy not Supplied (ENS) index is proposed, where the capacity is handled by curtailment devices in the network such as sectionalizers and the energy supplied by DERs which considers Flexibility Services (FS) within a market environment. The decision variables include the investment and operation of tie-lines and buying regulation services from DER such as Distributed Generation (DG) and Battery Energy Storage Systems (BESS). The results validate the cost-effectiveness of the proposed method through implementation of these technologies to improve the reliability of the DS, within a comprehensive set of case-study scenarios for a 16-bus UK generic distribution system (UKGDS). The case study results indicate that significant savings can be achieved through the proposed method, ranging between 36%–71% depending on the level of automation in tie-line operations in combination with the settlement price for the power-balance of FS. This illustrates that the proposed DS reliability cost-based optimization method could have a significant impact for real world DG and BESS applications. / This work was supported in-part by Innovate UK GCRF Energy Catalyst Pi-CREST project under Grant number 41358, and in-part by University of Bradford under the SURE Grant scheme (Grant Number 023000/66005).