PE Elektroprivreda Srbije (Electric Power Industry of Serbia - PE EPS) is of a strategic importance for national economy. Long-term policy of depressed electricity price has caused a number of distortions, mainly through direct impact on the operations of EPS and a number of other effects such as irrational consumption, high energy intensity, low charges, high level of technical and commercial losses, etc. Serbia still has the lowest electricity price in Europe, but regulated price model provides a certain profit level for EPS. The aim of this paper is to show the potential that the electric power industry as a branch can have if the Government provides the conditions for its sustainable operation.