The main function of an electric power transmission system is to provide power to consumer premises with high level of quality in safe and economic way, in order to provide stability and integrity of the power system. Transmission System Operator (TSO) must provide that stability with services that have their price on the electricity market. Concept of the ancillary services market is accepted, so TSO must pay for those services in order to ensure system stability for their customers. Ancillary services exists from the very beginning of electric power industry, although they have not existed as separated services in economic terms because of the fact that all parts of the electric power system, from production to distribution of electricity was under the same vertically integrated (incumbent) company, and there were no need for separated charging for those services. Ancillary services can be defined as those functions performed by the equipment and people that generate, control, and transmit electricity in support of the basic services of generating capacity, energy supply, and power delivery. In Croatia ancillary services are defined as purchasable, individual services, provided by network customer (e.g. producer) upon the transimission system operator`s request, and all the costs are refunded by TSO. Basic system ancillary services are frequency regulation, voltage control and black start capability. But during the last decades picture of the electricity sector is changing so today we have all parts of the electric power industry separated and vertically integrated utilities do not exist anymore as one integral company. Because of that, TSO as independent company responsible for transmission must procure ancillary services on the open market, provided by any producer connected to the power grid and their price is based on supply and demand concept or if ancillary market does not exist, is regulated by energy regulatory agency. Electric power system needs and will need ancillary services in the future to achieve stability of the system and quality of the transported energy. Rising number of renewable sources should be considered, and enough balancing energy with ancillary services should be provided. There will be more and more difficulties in finding power plants capable of providing such services, because with current pricing management there are no incentives for power utilities. That problem could be solved by forming ancillary services market with prices that will encourage new investments in power plants with ablitiy of production electricity for ancillar services.