At present, the influence of implementing demand side management on generation system reliability was studied by more and more academics. Demand side management can improve energy efficiency and reduce the maximum load demand, which is equivalent to an indirect increase in power generation capacity of the system, thus can improve the reliability of generation system. This paper firstly introduced the reliability index system of generation system, then the reliability analysis model which includes generation capacity model and load model was respectively built, and then the non-sequential Monte Carlo simulation method applied in generation system reliability evaluation was analyzed. Secondly, adopted the simulation to quantify and set the IEEE reliability testing system RTS (Reliability Test System) as an example to analyze the effect of demand side management on generation system reliability evaluation, the analysis results show that the implementation of DSM can improve the energy utilization and reliability of generation system, thus the system can be more secure, economic and reliable to supply electric power for electricity users.