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How to Avoid Extra Charges from Your Power Company and Fix Your Power Factor Problems

June 5, 2023

reduce industrial electricity demand charges

While most people believe that lower power should mean lower energy bills and fewer penalty fees, this is not the reality. The truth is that a lower power factor will cost you more over the long haul. The majority of utility companies charge a “demand fee” if the “power factor” is below a certain point. This is a common practice.

Understanding Power Factor

The power factor is a quantity between 0 and 1. It measures how much of the electrical current is being used to generate work. This is compared to the total load on the system.

Real power is the energy that is used to do tasks, such as lighting a light bulb or powering a drill. Apparent power is the sum of voltage and current in a system. This includes power absorbed by magnetic fields.

We can understand this concept by thinking of an old-fashioned mill wheel. It is partially submerged in a river. This is done to generate work. If the water pushes the wheel powerfully enough, it will move and produce a useful effect, or real power.

Pouring cups of water over the wheel would not be enough to move it. The weight and inertia of the wheel would overpower any power present. Therefore, the power would be wasted. This is not a perfect analogy, but it’s a good place to start if you’re not an electrical engineer.

To complete the analogy, we might say that if your power factor is not what it should be, this is similar to water being diverted away from your wheel upstream. If this were electricity, it would still be sent from the power company when you activate a device, and you will still pay for it. Assuming we could demand that more water come downstream to move our wheel, clearly, we are going to be paying for more power than it takes to do the work we require.

To get the full benefit of the electricity that we pay for, we need to improve our power factor. Now that we have this rough analogy to work with, let’s look at what causes low power factor in the real world.

What Causes Low Power Factor?

Low power factor can be understood in two ways: leading and lagging.

Lagging power factor can be caused by a number of conditions, often by inductive devices like arc welders, solenoids, fluorescent ballasts, lifting magnets, and transformers, just to name a few. Leading low power factor is usually caused by fixed capacitors that are hooked into the system during periods of low load.

Either way, this reduces the ability of the available electrical current to power our devices, heat our homes, and generally get work done. No matter what the cause of low power factor, it is a problem that should be remedied. The alternative is more stress on the electrical system, higher electrical bills, and occasional penalty fees from the power company.

Power Factor Correction Study & the Solution

Fortunately, the reality is not like our mill wheel analogy in that the problem will be on-site in the location where you use electricity and not at some “up the river” location. This means that the solution is entirely within your grasp. The first step is to perform a power factor correction study.

Power Factor Correction Study

The purpose of the study is to determine exactly what is causing the high penalty fees and to fix the problem or problems. We begin by collecting energy usage data and other information from the customer.

We will look at the customer’s electricity bill and examine the rates of charge they are receiving. Looking at energy usage and the amount you are being charged is the best place to start. This analysis will tell us right away whether or not your power factor is what it should be.

In the next portion of the study, we will determine the actual (kW) and (kVAR) power flow and factor in each branch of the power system. We will determine the power requirements, power ratings, and capacitor locations. This will enable us to develop an accurate and useful electrical economic analysis and determine a payback period for the recommended equipment that suits your budget.

Power Factor Solution

Once we understand exactly what your power factor correction needs are, we will add the appropriate number of stepped capacitor banks to remedy the problem. The application of these devices will precisely match the deficiency, bringing your power factor to its optimal state for the given system.

What makes Quad Plus truly stand out is our unparalleled proficiency in understanding the precise application of capacitors and the potential hazards they may pose when installed near non-linear loads, such as VFDs. We acknowledge the complex set of challenges that can arise from these installations. With our cutting-edge modeling capabilities, Quad Plus can precisely determine the most appropriate technology to address power factor concerns, ensuring that it rectifies the issue without creating any additional risks within your plant.

Once the needed stepped capacitor banks are installed, you will notice a sharp decrease in your monthly utility bills. Perhaps even more importantly, you will be spared those vexing penalty fees that so many homeowners and businesses deal with. Finally, your power system will sustain less wear and tear over time. This means you will need to pay for fewer repairs, and the risk of fire, injury, and property damage will all be significantly lower.

At this point, we will determine the monetary savings you can expect to enjoy as a result of the correction and develop a payment plan based on those improvements. Once your adjustments are paid off, you will keep the savings for the remaining life of your electrical system. In this way, we see that the service and capacitors are not just a proven fix that you can buy, but a long-term investment that you will benefit from for as long as you own your home, business, or other facility.

The team at Quad Plus will stand behind their work, ensuring that the adjustments are stable and produce the desired effect before the job is considered complete. Your satisfaction is guaranteed.

If you are experiencing high penalty fees from your power company, your system needs to be studied and re-calibrated. To learn more about power factor, how it can fall out of the optimal range, and how it can be restored to an optimal state, saving you time, money, and repairs, contact the power factor experts, Quad Plus