But would that not happen if any other means to reduce revenues were used, such as more efficient devices, better insulation, etc?

Better insulation means a motor runs less. When the motor runs less it means less kWh and kvarh.

Better efficiency might mean we can use a smaller motor. A smaller motor means smaller kW and smaller kvar.

The meter doesn't (and can't) run backwards all the time. The net sum will still be positive revenue for the pocos, just a reduced positive revenue.

The problem is, part of the load is powered by the PV array and part is powered by the POCO. You have reduced the kWh the POCO must deliver but not the kvarh that is normally associated with those kWh. The POCO uses the kWh and kW billing units with an assumed or average power factor to determine what to charge to cover the kW, kWh, kvar, and kvarh costs.

Since the real component has been reduced without an accompanying reduction in the reactive component, it is the same as if they were serving a load with a horrible power factor. They can compensate for this with an excess reactive load penalty if they measure the reactive load.

But back to Julie's original question, "There's a lot of stink about PV and power factor and I'm trying to understand what the heck the utilities want." I am curious as to what she is asking and why. I have not heard of any such stink. I also would like to know what the utilities want, especially if it is something we are not being taught in class.

They want the customer to manage their power factor. For a simple example, imagine a 1,000 kW customer with ten 100 kW motors with a 90% pf. These each would have a var load of 48.43 kvar. So we have 1000 kW and 484.32 kvar for a 1111.11 kVA total load at a 90% pf. The utility would base their bill on 1000 kW and include enough in the rate to cover the cost of var loss and the 1111.11 kVA of equipment.

If we were more efficient in our process, we could use one less motor. We would have 900 kW and 435.89 kvar for a 1000 kVA total load at a 90% pf. The utility would base their bill on 900 kW and include enough to cover the cost of var loss and the 1000 kVA of equipment.

But suppose instead of being more efficient we added a PV array to crank out 100 kW. We would have 900 kW and 484.32 kvar for a 1022.04 kVA total load at a 88.1% pf. The utility would base their bill on 900 kW. They would have var loss associated with 484.32 kvar and the equipment would have to be sized to handle 1022.04 kVA of load but they would only collect enough revenue to cover var losses associated with 435.89 kvar and equipment sized for 1000 kVA of load.

It is not just a PV thing. It is the same for any generator behind the POCO meter. The generator needs to pick up enough of the var load to keep the metered power factor within acceptable limits or the POCO will either lose money or have to charge an excess var load penalty.

If the utilities she speaks of require a pf of -1, I would like to first see it in writing and then see it in practice.

Forget all that negative stuff as it is just confusing the issue.

REMF from an auxiliary power source is not reactance. At least that is what I was taught. Since it is not reactance, it cannot be a part of the power factor ratio.

But it does because the load has a kVA need made up of kW and kvar. If the aux source supplies the kW the utility is left to supply the kvar. The utility could be in the kvar business, and are to some degree, but the retail rates are not really designed for kvar only sales. The var load is normally just a parasitic part of the main business. The utility tweaks the rates to account for this parasitic component but the main business is to sell energy, not supply vars.