The electric power system lies at the heart of modern society. To optimize the total cost of the system a trade-off between investment and reliability must be made. Power system reliability analysis (PSRA) typically quantifies the reliability of the system using fixed component failure rates. However, the probability of failure for a component increases with usage. Therefore, a health index model based on failure modes, effects, and criticality analysis (FMECA) is presented to facilitate in the calculation process. FMECA is used to identify the failure mechanisms and assign a risk priority number (RPN) based on the severity, occurrence, and detectability of each failure mechanism. The health index is then evaluated based on failure mechanisms rather than directly from condition data and each failure mechanism’s contribution to the overall health index is weighted relative to the RPN. A case study is presented where the health indices for a fleet of high-voltage circuit breakers (HVCBs) are evaluated based on data obtained from the Icelandic transmission system. The trip coil current (TCC) is a readily available measurement that can detect electrical and mechanical issues within HVCBs and was used as a key assessment criterion in determining the health indices for the HVCB fleet.