The electricity market in Portugal was recently opened up to all consumers. However, it remains highly concentrated in terms of control of production and supply and long-term power purchase arrangements still coexist with free market operation. This paper discusses the electricity market restructuring process in Portugal, presenting the market main characteristics in past years and the present situation. The evolution of the electricity prices in Portugal is analysed, and a comparison with EU-15 is presented. Special attention is given to Spain due to the possibility of cross-border competition in the future, arising from the formation of the Iberian electricity market. (c) 2006 Elsevier Ltd. All rights reserved.