The mechanisms of power flow in electric power systems subject to harmonic sources will be studied. The sources of the harmonics are primarily nonlinear loads and generation devices (e.g., industrial rectifiers and inverters). The mechanism by which these harmonics propagate in the network will be analyzed in terms of the active and reactive power flow and the distortion power characteristics. Alternative formulations of reactive voltamperes are compared with regard to their propagation characteristics. The total harmonic distortion and C-message weighted index is studied for guidelines on harmonic power flow characteristics. Techniques to identify the source of harmonics from network measurements are proposed.