The Law on Energy that came into effect in Lithuania opened up the electricity market. This enables consumers to choose a supplier of electricity according to the quality of the service and the price of electricity. As a result, competition and efficient management of the electrical industry is ensured.

Electricity trade in the market is performed by concluding sales and purchase contracts between the two participants in the market—the producers and the distributors (suppliers) of electricity. Contracts can also be concluded between the market operators and the producers. Participants in the market may also sell electricity at an auction.

The companies that hold the licence of market operator, operator of a transmission grid, or public or independent supplier or those that have a permit to produce, export and import electrical energy become participants in the electricity market. All participants in the market are registered with the market operator, and their relationship is regulated by the Rules for Electricity Trade.

Since the 1 of July 2004, all consumers except for household ones gained the status of a free consumer. Free consumers can choose a supplier for the required amount of electricity for an agreed price. They can buy electricity directly from independent suppliers for a contract price or a public supplier for the prices approved by the National Control Commission for Prices and Energy. The relationship between the free consumers and selected suppliers concerns the production of electrical energy only and does not include transmission and distribution of electricity.

According to the provisions of the Law on Energy, since the 1 July 2007, all electricity consumers in Lithuania will be entitled to the status of a free consumer and the right to make a free choice of a supplier.