What is Power Factor?

Power Factor is a measure of how effectively electrical power is being used. A high power factor (on a scale of .01 to 1.0) indicates efficient use of the electrical distribution system while a low power factor indicates poor use of the system.

From a utility standpoint, maintaining a high power factor reduces the current flow that’s needed to improve loading conditions and stabilize distribution voltage. As a result, most utilities charge additional fees or penalties when power factor drop below the 90 percent minimum as measured at the customer’s electric meter.

From the end-user’s perspective, maintaining a high power factor is most beneficial in that system losses are minimized, electrical distribution system efficiency is optimized and energy cost savings are maximized.

What is a Power Factor Penalty?

When a utility serves a commercial or industrial facility that has poor power factor, the utility must supply higher current (amperage) levels to serve a given load. In a situation where real power demand (kW) at two facilities is the same, but one has an 85 percent power factor while the other has a 70 percent power factor, the utility must provide 21 percent more current to the second facility to meet that same demand. Conductors and transformers serving the second facility would need 21 percent more carrying capacity than those provided to the first. Additionally, system losses in the distribution conductors would be 46 percent greater in the plant with the lower power factor.

A utility is paid primarily on the basis of energy consumed and peak demand supplied. Without a power factor billing element, the utility would receive no more income from the second plant than from the first. As a means of compensation for the burden of supplying extra current, utilities typically establish a “power factor penalty” in their rate schedules. A minimum power factor value is established, usually 90 to 95 percent. When the customer’s power factor drops below the minimum value, the utility collects “low power factor” revenue. The lower the actual power factor, the greater the penalty.

The Concept of Power Factor

Many loads in commercial and industrial electrical distribution systems are inductive. That means they are powered by an electro-magnetic force. Examples include motors, transformers, fluorescent lighting ballasts, and induction furnaces. The line current drawn by an inductive load consists of two components: magnetizing current (Reactive Current) and power-producing current (Real Power).

The magnetizing current is the current required to sustain the electro-magnetic flux or field strength in the machine. This magnetizing current doesn’t do useful “work,” but circulates between the generator and the load. It places a heavier drain on the power source, as well as on the power source’s distribution system.

The real power is the current that reacts with the magnetic flux to produce the mechanical output of the motor. Real power is measured in kilowatts (kW) and can be read on a wattmeter. Real power and reactive power together make up apparent power. Apparent power is measured in kilovolt-amperes (kVA).

Power Factor is the ratio of real power to apparent power. To determine power factor (PF), divide real power (kW) by apparent power (kVA).

So, Why Improve Your Power Factor?

Some of the benefits of improving your power factor are:

• Your utility bill will be smaller. Low power factor requires an increase in the electric utility’s transmission and distribution capacity in order to handle the reactive power component caused by inductive loads. Utilities usually charge customers with power factors less than about 0.95 an additional fee. You can avoid this additional fee by increasing your power factor.

• Your internal electrical system’s capacity will increase. Uncorrected power factor will cause increased losses in your electrical distribution system and limit capacity for expansion.

• Voltage drop at the point of use will be reduced (i.e. improved). Voltages below equipment rating will cause reduced efficiency, increased current, and reduced starting torque in motors. Under-voltage reduces the load motors can carry without overheating or stalling. Under-voltage also reduces output from lighting and resistance heating equipment.

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