Implementation of Performance Based Regulation in Distribution of Electricity in Croatia

Abstract:- Directive 2003/54/EC emphasized the importance of introduction of regulated third party access as a prerequisite for introducing fully functioning electricity market. This provision relates both to transmission and distribution of electricity. In addition it gives regulatory authorities powers to set or at least approve terms for networks ’ access, including a methodology for setting transmission and distribution tariffs. Croatia as a candidate country for the EU membership has to adopt respective EU directives ’ provisions through its national legislation. This article gives the state of the art of distribution activity in Croatia in respect to the energy market reform. In addition it deals with different methods of economic regulation, emphasizing the possibility of applying Performance Based Regulation in distribution of electricity in Croatia with the reference to the quality of supply mechanism