Over the last fifteen years, the European Power Sector of the European Union and Croatia have undergone a reform process to improve its efficiency, increase quality and security of supply, and lower prices for the final consumer. Prior to the implementation of the reform, the power sector was a natural vertically integrated monopoly in state ownership, as the model of the organization of the electricity market proved ineffective in realizing the real price. In the process of EU accession, the Republic of Croatia has had to align its legislation with the third package of power rules, and then the structure of the power sector. Special emphasis was placed on the abolition of monopoly ownership and the introduction of competition. HEP as the holder of the Croatian power sector has undergone reforms of deregulation, liberalization, restructuring and privatization. The ultimate goal of the reform process is to introduce competition on the electricity market and to give the end customer the option of choosing a supplier, ie a distributor from which he will buy electricity. From the example it can be concluded that privatization and regulation itself does not lead to an improvement in the economic performance of the power sector as such as the competition stimulates the improvement of economic performance, which was the case in Croatia in 2013. when competition appeared.