Where is the Power Factor Penalty! I found it!
The common residential rate will bill on KWH unless you see the letter "D" behind it. Then it will penalize you for going over a specific KW during peak demands.
This is were small companies start getting penalized for high energy consumption but not a low Power Factor. The Utility Co. figures an average power factor for residential and small businesses.
If they were to grow in size they should get on a new rate plan. This is when their PF really starts to matter. Simply said, these rate plans bill on the KVA rather than the KWH.
My clients bill shows clearly his KW is about 247 and his KVA at 321. That's a PF of .74!
I can get him billed on a rate plan that bills according to his KVA rather than the KWH. Average KVA cost is roughly $13 per. If I get the PF to 99% they will save $950 per month!
You are confusing power factor with load factor. As they grow, the companies are being penalized for a poor load factor, not high energy consumption. In other words, they are being penalized for fast energy consumption.
Originally Posted by John Altenburg
Demand is a measure of how fast you pull energy off the system. Consumption is how much you pull off.
If I have a steady load and use 100,000 kWh over the span of 8 hours, my peak demand is 12.5 kW. If I have a steady load and pull 100,000 kWh over 3 weeks (504 hours), my peak demand is 198 kW. In both cases, my average demand for the month (730 hours) is 137 kW.
Load factor = kWh/Peak kW/#hours in period. The fast user has a load factor of 1.1%. The slow user has a load factor of 69%.
Low is 20% and lower. High is 60% or higher. Everything else falls in between.
The fast user (lower load factor) requires much bigger equipment and only uses it part of the time (wasted resources) so gets charged more for the same consumption.
For billing & rate simplification, non-demand customers typically are called those using 2000-3000 kWh per month or less. Service size may also be used as an indicator of when a customer should have a demand meter.
Power factor penalties can be imposed on those with low or high consumption. Usually, the small, non-demand customers have these costs built into the rates.
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