Licensing of energy companies enables to implement state policy in strategical energy sector, where competition does not exist. Licenses are one of the most important instruments used by the independent energy regulator. This instrument not only allows perform the function of regulation under the licensed company’s activities in more efficient way and ensure the established level of service quality, but also ensures effective control over the different markets in energy sector. Licensing and regulation of energy companies is one of the functions established by the Law on Energy and separate laws for the different energy sectors and delegated to the National Control Commission for Prices and Energy (Commission). Licensing of energy companies started a few years ago in Lithuania. Shortly after the practical experience of the Commission revealed that inconcistency of some regulations which where in force, caused a possibility to interpret the same requirements of the legal acts in different ways. This circumstance did not allow the Commission to solve the rising problems quickly and objectively and to ensure proper and effective supervision of the already licensed companies. In addition, analysis of the requirements of the EU legal acts and of other countries experience disclosed that the licensing system which prevailes in Lithuania partially contradicts the competition principles established by the EU and diminishes the possibility of competition in the energy sector in spite... [to full text]