Dieter Schmitt contributes that five years after the liberalisation of its electricity and gas markets Germany now has no choice but also to substitute the hitherto preferred negotiated by regulated third party access. This requires a profound amendment of the German energy law, last not least because finally it was decided to introduce a sector specific regulatory authority with own rules and procedures. The proposed regulation of the electricity and gas grids--meanwhile presented to the Parliament--has fundamentally been criticised regarding not only the procedure but also specific details of the planned ex post--cost as well as price cap--regulation and the authorities to be involved. The author analyses the arguments in detail, finally resulting that neither cost nor price cap regulation could be recommended with respect to huge problems remaining open and that only the immediate development and introduction of incentive regulation, i.e. the explicit use of market forces for regulatory purposes will ensure permanent efficiency gains in this field. Finally the paper argues that sector specific regulation of access to the grid in any case has to be supplemented by misuse of market power regulation, but which continuously has to be adjusted to the profoundly changing environment of the electricity and gas sectors.