Amount of electrical energy losses is one of key elements that show cost-efficiency and quality of distribution company business. New detailed approach of total losses determination, based on balance sheet between input energy (from transmission system) and outcome energy (to end-users) in a distribution system is presented in thesis. Some suggestions and improvements for power line flow calculation (such as a time and line in-depth repartition) are proposed to get as accurate results as possible. Analysis of technical losses in distribution power system followed by precise calculation and based on measured data from remote control supervising system as well as on a load diagram measurements in MV and LV network is described here. Nontechnical losses are obtained as a difference between total losses and technical losses; also there are good preconditions for nontechnical losses allocation along the LV lines. New methodology for technical losses reduction is described: principally by optimizing power flows in the network according to technical parameters of distribution network elements and by optimizing network elements according to appurtenant power flows. It was indicated that use of a modern measurement devices efficiently decreases nontechnical losses. All measures and activities described in thesis are realized in the power network of Nova Gradiška as part of distribution area of Elektra Slavonski Brod.