The role of the level of reliability of meeting a desired hydropower system's firm energy yield and quantifying the uncertainty of stream-flows in design components of a hydro-electric project is assessed in this study. Sequential stream flow routing (SSR) is used in a reliability-based simulation (RBS) model by which the energy potential of a hydro-power system may be determined at different normal water levels. To investigate how important the adopted reliability level would be, the RBS model was executed at different long-run reliability levels. For the system under study, i.e. the Baktiari hydropower dam, one can realize that the system's installed capacity, firm and secondary energies will respectively change by 44, 38 and 10 percent if the reliability level varies between 80-100 percent. The problem was also explored by imposing an additional medium-term (annual) reliability constraint. It was found that the additional reliability constraint would change more the installed capacity and energy values generated. The higher the medium term reliability level, the more decrease in installed capacity and the system's firm energy yield. Subsequently, the impact of uncertainty in stream-flow process was investigated by generating a large number of synthetic correlated and non-correlated stream-flow series and then estimating the statistical moments of the design variables instead of the ones estimated based on a single historical time series of stream-flows. The results indicate the system's installed capacity and annual firm energy yield may vary by 14-17 percent in case of correlated stream-flows and by 8-17 percent in case of uncorrelated stream-flows. This is because of uncertainty in stream flow process represented by different samples synthetically generated.