In this paper we start by recalling the seminal concepts underlying adaptive reliability of Tom Dy Liacco conceived almost four decades ago [1]. Unfortunately, these concepts have not developed nor have been adopted by the industry yet. Recent efforts toward grid modernization will fall short of the anticipated expectations unless this gets implemented. Two distinct, yet related, challenges and opportunities are: 1) making electric energy services reliable and secure over broad ranges of conditions created by un-intended and/or intended system failures; and, 2) ensuring at the same time environmental and economic sustainability of energy services. We stress that even in the regulated industry this can be achieved only by implementing adaptive reliability. Moreover, as the industry restructures and novel resources get deployed the notions of adaptive reliability must evolve as well.In this paper we first describe basic ideas put forward by Dy Liacco and their relevance for enhancing the grid performance. In particular, we assess missed opportunities, such as gross under-utilization and short-/ long-term inefficiencies due to lack of such industry framework in the regulated industry first, as well as difficulties in preventing wide-spread blackouts during conditions unfamiliar to the system operators, second. State-of-the-art concepts up to date which could and should be utilized in order to move today's industry forward are discussed. We stress that the basic temporal, spatial and organizational decompositions of complex power grids routinely used by the industry which make the on-line management possible during normal conditions no longer hold when the interconnection is operated far away from the conditions for which it was designed. This fundamental observation requires a framework which re-captures the temporal and spatial inter-dependencies in order to manage the complex grid adaptively during abnormal conditions. Modeling, monitoring and decision making framework capable of re-capturing these inter-dependencies while keeping the complexities manageable is introduced as the basis for monitoring and decision making when the system is outside the nominal conditions [2],[3]. Adaptive reliability amounts to: 1) selecting performance subobjectives adaptively depending on the conditions sensed at each level of an otherwise decomposed system; 2) exchanging minimal information for capturing systemwide efficiencies across horizontally separated control areas; and 3) implementing decisions at each level of the decomposed system in coordination with the rest of the system. This notion of adaptive reliability is contrasted with the worst-case (N −1) reliability criteria currently practiced by the industry. Key roadblocks to implementing adaptive reliability are discussed at some length, and specfic suggestions are made for overcoming these. In particular, the challenge of providing the right information about the status of the equipment, coordination with neighboring control areas and status/logic of protective relays ar...