In order to calculate and analyze the effect of two transmission lines in parallel on the reliability evaluation of bulk power system, a model including independent outage, common mode outage and dependent outage of these lines is deduced and a new algorithm corresponding to the model is presented. Two transmission lines in parallel including common mode outages and dependent outages can be really simulated as a multi-state component. While reliability indices are calculated, the probability and frequency of independent outage, common mode outage and dependent outage of a system failure state can be calculated at the same time, and computation complexity is reduced. The proposed model and algorithm are applied to the RBTS system, IEEE One Area RTS96 system and a real power system for reliability computation and analysis. Results show that the new algorithm is credible and validity.