How to read your electricity bill: active energy, reactive energy and peak demand

A business electricity bill has more line items than a household bill, and some of them hide the quickest savings. This guide explains what each typical item means and what to look out for. Names and structure differ between suppliers, tariff groups and entities — always go by your own bill and the applicable tariff rates.

Basic information on the bill

• Metering point code (EIC or internal number) — identifies your metering point; you will need it for any request to the operator or supplier.
• Tariff group / consumption category — e.g. household, low-voltage non-household, medium voltage. It determines which items are charged.
• Contracted / approved connection capacity — the upper load limit, and also the cap on solar plant size for prosumers.
• Billing period and meter readings — start and end readings by tariff.

1. Active energy (kWh)

This is the “useful” energy you actually consume — to run machines, lighting, heating. It is measured in kilowatt-hours (kWh).

With two-rate metering, consumption is split into:

• higher tariff (VT) — daytime,
• lower tariff (NT) — night-time and, depending on the rules, weekends.

Example: in FERK’s price decision for Elektroprivreda BiH’s public supply (applicable from 1 June 2024), the higher daily tariff for non-household customers on weekdays runs 07:00–22:00 in winter time and 08:00–23:00 in summer time. Check the hours for your tariff group and supplier.

What to look for: the ratio of VT to NT consumption. If some consumption (e.g. EV charging, water heating, pumping) can be moved to NT hours, the saving is immediate.

2. Billed (peak) demand (kW)

Larger business customers are billed for power, not just energy. Billed demand is, simply put, the highest average load measured over a metering interval (usually 15 minutes) during higher-tariff hours in the month. It is charged per kW, monthly.

Why it matters: one short peak — e.g. several large machines starting at once on a Monday morning — sets the charge for the whole month.

How to reduce it:

• stagger the start-up of large loads (compressors, furnaces, chillers),
• introduce peak-load control (load management),
• use dynamic power management for EV chargers,
• a solar plant can shave peaks during sunny hours, but not reliably.

3. Reactive energy (kvarh)

Reactive energy is drawn by motors, transformers and other inductive loads. It does no useful work but loads the grid. On the bill it usually appears as excess reactive energy (“prekomjerno preuzeta reaktivna energija”).

In the Federation of BiH, the General Conditions for Electricity Supply use an average power factor of cos φ = 0.95 as the reference. That means about 0.33 kvarh per 1 kWh of active energy is “allowed”; anything above is excess and is charged.

Quick check: divide reactive energy (kvarh) by active energy (kWh) for the same period.

kvarh/kWh ratio	Power factor	What it means
≤ 0.33	≥ 0.95	fine
0.33–0.50	≈ 0.89–0.95	you are paying for some reactive energy
> 0.50	< 0.89	a significant cost — compensation is almost certainly worthwhile

More on the fix: Reactive power compensation.

4. Network charges

Charges for using the transmission and distribution networks are regulated and do not depend on your choice of supplier. They may be shown separately or included in the price, depending on the supply model.

5. Other items

• Renewable energy support fee and other statutory fees.
• Monthly fee / metering point fee.
• VAT.
• For prosumers: energy delivered to the grid, the credit balance (in kWh or BAM) and carry-over to the next period.

6. Annual bill review checklist

• Add up VT and NT consumption over 12 months — does the profile match how the site operates?
• Record billed demand by month — are there peaks that stand out?
• Calculate the kvarh/kWh ratio — are you paying for reactive energy?
• Compare contracted connection capacity with actual billed demand — is the connection oversized or close to the limit?
• Check the energy price and contract model (fixed/indexed, term).

If you would like us to analyse your bills, send them via the quote form — as part of energy consulting we show you where the fastest savings are.