Different from the conventional day-ahead generation schedules, an optimal dispatch model is proposed considering the demand response(DR) and reliability measures. In order to address the increasing peak-valley gap, the time-of-use(TOU) tariff has been widely implemented in China. On the basis of it, a dynamic incentive compensation mechanism is established to motivate consumers to take an active part in DR. Meanwhile, to deal with the reasonable configuration problem of reserve capacity, the cost of expected energy not supplied(EENS) is combined into the objective function, which ensures the security of power grid operation. The results of IEEE 24-bus system show that the model considering incentives and the cost of EENS can decrease the operation cost effectively. On the premise of guaranteeing the reliability level, the power system can operate economically and safely in current market conditions.