In this work by examined the model of the electricity market of Ukraine and the prospects for its reform. Was made comparative analysis of incentive regulation mechanism carried out to improve the investment climate in the electricity sector. Objective: to stimulate regulation of power supplying companies in the existing and reformed electricity market of Ukraine. Method of implementation: implementation of tariff regulation of power supplying companies. Results of the study: current model of electricity market of Ukraine has been analyzed and examined; its advantages and disadvantages have been defined; prospects of reforming the electricity market of Ukraine – that is, the introduction of market of bilateral contracts and balancing market (MBCB), have been studied; the benefits of introducing incentive tariff regulation of power supplying companies have been examined. Conclusions: showed by that a necessary condition for improvement of power supplying companies and increasing their investment attractiveness is the introduction of incentive tariff regulation.