How is the electricity bill generated? Short answer: consumption (kWh) and instantaneous power (kW) data read from the meter are divided into items according to EMRA approved tariff formulas and subscriber status; At the end, the total amount is calculated by adding taxes and funds. Eligible consumers generally receive two separate invoices - energy cost from the supplier and transmission-distribution items from the distribution company. A single unit price is applied in the national tariff. It is not possible to read an invoice without recognizing the items; This guide explains what each item is, how it is calculated, and which subscriber type it applies to.
Invoice formation chain: measurement → tariff → item → tax
During the billing period, the meter (or OSOS) produces records of active consumption (kWh), reactive consumption (kVArh) and peak power (kW/demand). The distribution company reads this data; It applies the formulas in the EMRA tariff table according to subscriber group, contract strength and tariff type. On the supply side, the energy cost is calculated through a free consumer bilateral agreement, SKTT or (if out of scope) the assigned supplier. After the base is formed, legal deductions such as VAT, BTV (Municipal Consumption Tax), TRT share and energy fund are added. As highlighted in our article on the importance of energy management and monitoring, metering data is the beginning of this chain — incorrect kWh will make all items miscalculated.
kWh
Unit of measurement (energy)
active consumption
kW
Unit of measurement (power)
Contract strength / demand
(PTF+YEKDEM)×KBK
SKTT formula
Cost based tariff
What is the energy cost?
Energy cost is the main item paid for active electrical energy (kWh) consumed. It appears on the invoice as “active energy cost”, “energy consumption fee” or “supply fee”. Unit price is determined according to subscriber status: (1) Periodic fixed kr/kWh in EMRA national tariff; (2) (PTF+YEKDEM)×KBK formula in SKTT — PTF hourly, YEKDEM monthly; (3) in bilateral agreements, fixed, indexed or spot+P formula in the contract. As explained in our glossary article on the difference between kW and kWh, the energy cost is simply multiplied by kWh; Power fee is a separate item. The effect of the hourly market price on the energy cost is detailed in our glossary article What is PTF?
What is EMRA national tariff?
EMRA national tariff is the unit price table applied to low consumption subscribers through assigned supply companies and periodically approved by the Board. Residential, small commercial and industrial subscribers below the SKTT limit can stay in this tariff. In the national tariff, the energy cost comes with a fixed unit price in a single line; PTF and YEKDEM are not separated. When the SKTT limit is exceeded (2026: residential 4,000 kWh/year, industry/commercial 15,000 kWh/year) and if there is no bilateral agreement, the transition to cost-based tariff begins — the transition schedule is explained in our SKTT and Free Consumer 2026 guide. Although the national tariff may seem "cheap", the unit cost changes rapidly after the limit is exceeded in high consumption facilities.
| Tariff | Who has it? | Energy cost formula | Hourly price? |
|---|---|---|---|
| national tariff | Subscribers below the limit | EMRA fixed unit price | No — periodic constant |
| SKTT | Over the limit, free consumer without a contract | (PTF+YEKDEM)×KBK | Yes — PTF hourly |
| bilateral agreement | Free consumer + contract | Contract condition | Generally yes (spot/index) |
How does an eligible consumer purchase hourly electricity?
The eligible consumer purchases electricity by making a free supply contract (bilateral agreement) with his supplier or at a tariff based on market cost within the scope of SKTT. The source of hourly pricing is EPİAŞ Day Ahead Market (DAM); The Market Clearing Price (PTF) formed here changes on an hourly basis. The supplier calculates the period energy cost by multiplying the subscriber's hourly consumption profile by PTF (and YEKDEM, KBK, if any). Even if there is a “fixed price” contract in a bilateral agreement, the supplier manages hourly market risk in the background; In “spot+P” contracts, the price is directly indexed to the hourly PTF. The OSOS hourly profile shows which hours the eligible consumer consumes at a high unit cost — reducing consumption during peak hours directly reduces the energy cost.
What is the distribution fee?
Distribution fee is the item paid to the distribution company to deliver electricity to the subscriber through the transmission and distribution network. It appears on the invoice as the "distribution fee", "system usage fee" or "transmission-distribution" line. Its components are defined in the EMRA tariff table; It is related to the consumption amount (kWh) and connection/contract power (kW). The distribution fee is independent of the energy cost — it is paid separately to the distribution company, even if there is an eligible consumer. For subscribers with SPP, distribution items are calculated based on net consumption after netting; not on gross consumption.
What is the power cost?
Power fee is a fixed or periodic item paid in return for the subscriber's contract power (kW) that is constantly kept "ready" from the distribution system. Contract power is the maximum traction limit in the distribution contract, as defined in our glossary article. If the peak power (demand) measured during the month exceeds the contract power, a power excess fee is added. The power charge does not reset even if consumption decreases — contract power revision requires application from the distribution company. Demand management and peak hour analysis are explained in our Contract Power and Peak Load guide.
What is reactive cost?
Reactive charge is a penalty item written on the invoice if the inductive or capacitive reactive energy (kVArh) exceeds the allowed limits. Loads such as motors, transformers and compressors draw reactive power; If there is no compensation, the reactive/active ratio increases. Subscribers with a contract power of 9 kW and below are considered exempt; Above limits vary according to contract power (below 30 kW inductive 33% / capacitive 20%; above 30 kW 20% / 15%). Limit calculation and compensation are detailed in our Reactive Energy and Reactive Cost guide. The reactive cost is independent of the energy cost — high kWh consumption does not guarantee a low reactive rate.
What is BTV (Municipal Consumption Tax)?
BTV (Municipal Consumption Tax) is the legal tax transferred to municipalities from electricity consumption. It appears on the invoice with the label “municipal excise tax”, “BTV” or similar. The base is generally the sum of the energy cost and certain transmission-distribution components; The rate varies depending on the subscriber group and municipal legislation. BTV is not directly affected by energy consumption efficiency — as consumption increases, the base increases. VAT is calculated separately on the basis including BTV or on the relevant items; The "VAT", "TRT share" and "energy fund" lines are included together in the invoice subsection.
| pencil | For what? | Unit/base | Who cuts? |
|---|---|---|---|
| Energy cost | Active electricity consumption | kWh × unit price | Supplier / assigned supply |
| Distribution fee | network usage | kWh + kW components | distribution company |
| power cost | Contract power reservation | kW (contract power) | distribution company |
| Reactive cost | Reactive limit exceedance penalty | kVArh (overshoot) | distribution company |
| power over | Demand > contract strength | kW exceedance | distribution company |
| BTV | Municipality share | Base × rate | Tax — reflected on the invoice |
| VAT / funds | Legal deductions | Rate × base | Tax — reflected on the invoice |
National tariff vs free consumer: bill difference
In the national tariff, there is a single supplier (incumbent supply), fixed unit price and generally a single invoice flow. The free consumer has a choice of suppliers; The energy price depends on the market or contract, distribution items come separately. The subscriber switching to SKTT loses the national tariff subsidy; The unit price is opened to PTF and YEKDEM fluctuations. What is YEKDEM is explained in our dictionary article, and the effect of the monthly announcement on the invoice. Knowing which tariff you are on is a prerequisite for correctly interpreting the energy cost line.
What to do to verify the invoice?
- Verify subscriber status: national tariff, SKTT or bilateral agreement.
- Match period kWh to OSOS or meter reading.
- Compare the energy charge unit price with the tariff table or contract.
- Check contract power (kW) and max demand value.
- Is the reagent rate under limit — see our compensation glossary entry.
- Reconcile supply + distribution invoices together.
Our How to Read an Electric Bill 2026 guide shows you step by step where to look for each item on the bill. In our electricity bill tracking module, OSOS data and items are automatically compared; Unit price deviation and reactive penalty are detected early. Annual consumption trends and the risk of exit from the national tariff can be monitored in our SKTT limit control tool.
Conclusion
Electricity bill; It consists of interconnected items, especially energy cost, distribution cost, power fee, reactive cost and BTV. Eligible consumers receive energy with hourly PTF; A fixed unit price is applied in the national tariff. Knowing the items is more valuable than looking at the total amount — because the opportunity for savings and objections lies on an item-by-item basis. ENOPTIMAL consumption management and invoice verification module provides operational control by combining these items with the OSOS profile.