The voltage and current in modern power system are no longer ideal steady-state sine waves, and have complex dynamic characteristics. It has attracted some attention on how to accurately measure electric energy under dynamic conditions. Based on the mathematical principle of S transform, this paper proposes a dynamic electric energy metering algorithm, which divides electric energy into four components, including DC, fundamental wave, harmonic and inter-harmonic of electric energy. The six dynamic test signals in the association standard are used as the input of the algorithm, and the performance and errors of the electric energy metering under steady and non-steady states are simulated and analyzed. The obtained results verify that, compared with the two conventional algorithms, the proposed algorithm has a better accuracy on measuring electric energy under dynamic conditions.