What is Power factor and reactive power?
Power factor is the ratio of real power (kW) to apparent power (kVA) in an AC circuit. Reactive power (kVAR) magnetizes motors and transformers but does no useful work.
Who pays for poor power factor
Industrial and large commercial customers with motor-heavy loads such as compressors, pumps, fans and chillers draw reactive power. Many utility tariffs bill those customers on kVA or adjust the bill for power factor, so the cost lands on plants and campuses rather than households.
The power triangle and a tariff example
Real, reactive and apparent power form a right triangle: kVA squared equals kW squared plus kVAR squared. A load drawing 800 kW at a power factor of 0.8 needs 1,000 kVA of capacity, and at 0.95 the same load needs about 842 kVA.
Tariff rules vary by utility. Pacific Gas and Electric Schedule B-20, for customers with maximum demand of 1,000 kW or more, bases its rates on a power factor of 85 percent and adjusts the monthly bill for each percentage point above or below it.
Power factor on the electric digital twin
The electric digital twin shows power factor, kVA and loading against rated capacity for each feeder and named load, with a power triangle for the selected node. That directs correction capacitors to the feeders that need them and shows when an existing capacitor bank has dropped out, which otherwise surfaces only as a reactive penalty on the next bill.