This dissertation contains the original algorithm for the research of the basic elements of the regulatory system in the energy sector. The researching method that has been implemented is based on the analytic outline of theoretical basis of regulation, a detailed analysis of already existing basic elements and the development of missing basic elements such as: the analysis of the competence of the Croatian Energy Regulatory Council, the analysis of the electricity market and gas market, the development of the method for determining the existing level of regulation. The appropriate models have been set, such as: the general model of energy activities' regulatory system with an aim of researching the functions of regulatory mechanism, the model of regulation by issuing the license to carry out an energy activity, the model of testing the process of collecting information for regulatory monitoring, the model of determining tariffs, the model of consumers' protection in the field of energy and services. Some important suggestions have been given to develop the energy activities' regulatory system and for further improvement of regulatory approach, especially: the choice of the type for the usage of Price-caps formula, the new organizational structure of regulatory body, the development of monitoring method for revenues and costs, the determining of access towards the issue of tariffs, the place and the role of the councils as organizational part of the regulatory body, a three-part connected system for consumers' protection insurance and a block diagram of consumers' protection procedure in the field of energy and services.