Harmonic distortions in electric power system are the main power quality concerns, mostly generated by nonlinear loads such as Variable Frequency Drive (VFD). A water treatment industry usually utilizes VFD to control their water pump motors during the operation. In this study, we investigated the effects of harmonic distortion resulted from VFD on the measurement accuracy in the distribution system operated by state-owned electric utility. The results showed that the VFD that employed the pulse width modulation (PWM) technique has adjusted the supply frequency of 50 Hz into specific number to control the speed of motors. Data recorded on energy meter for seven days exhibited the THDV of 3.27% and THDI of 36.37%. We found that the harmonic distortion has caused the energy measurement error of 1.2%, and this becomes potential losses for the utility because it could not be charged to customers due to the government tariff regulation.