One of the important issues in power system operation is improving reliability of power systems or maintaining it in an acceptable level. This paper presents thyristor controlled series capacitor (TCSC) impact on improving reliability of composite generation and transmission systems Oil the other hand, this paper investigates adequacy evaluation of hierarchical level two (HLII) including the effect of TCSC. In order to investigate the effect of TCSC, a four module model is considered in TCSC modeling. This model is combined with composite generation and transmission model to get a proper model for reliability evaluation. Effect of reliability of each module of TCSC, location of TCSC and thermal limit of lines are the factors that are considered in this paper and, as it has shown, these factors have a great contribution to reliability indices of power system. This paper evaluates Loss of Load Expectation (LOLE) and Expected Energy Not Supplied (EENS) as reliability indices. Optimal power flow (OPF) including the influence of TCSC is introduced to decide the load Curtailment. A two-machine, three-bus test system is used to show how effective the offered method is in improving the system reliability.