Power factor Tariff

Hi

You seem to be some government official who have to regulate or administer something and I would out of principle oppose you. My aim is sustainable / achievable / etc law with as few as possible teeth.

But maybe we have the same end-result in mind.

The first task is to have a look at superior law applicable to the industry. One would usually find the answer in black and white or hidden in there.

Then you have to prescribe fair P.F. deviation maximums in consultation with the subjects.

Penalties must be seen as a tool in achieving the (fair) objectives and not for penalising the subjects out of existence for not achieving unattainable goals.

If you charge the customer a fixed rate, say $5.00 per kva, what else would you need?

we charge for Kwh only and we do not have charge for KVarh.

we have only one type of charge which is energy charge (12 cent/Kwh) and the power factor in some industrial locations reach 0.6.

this is way we need to impose power factor regulations.

Ayman

we charge for Kwh only and we do not have charge for KVarh.

we have only one type of charge which is energy charge (12 cent/Kwh) and the power factor in some industrial locations reach 0.6.

this is way we need to impose power factor regulations.

Ayman

Since you know the pF at various sites. you need to advise ALL users of impending rate changes (coordinate with the state Public Utilities Commission) and then set up some level of "acceptable" power factor. When you talk to the Utility Commission, be sure to point out that the only other alternative is to raise rates on ALL customers because of the added costs being generated by a just a few customers who could easily correct their power factor if they wanted to do it.

The penalty for violating the new pF criteria should be simple- divide usage by current pF, then multiply by criteria pF and charge for resulting adjusted usage as "billed usage" at your current rates. If the new pF value basis is 0.8 and 0.6 sees that their bill will jump 33.3% in one month, they will take action quickly.

When you announce the new rate to customers, give examples of the impact to come- like 200,000 kWh with a pF of 0.6 would see a cost jump from $24,000 to $32,000. If you send out "Warning Letters" showing the customers what their new bill WOULD look like for 3 months before your new rate takes effect, everyone will be able to take action to resolve your problem. The risk of an $8,000/month hit (using the example) should generate a prompt response from almost everyone. Those who don't/won't change will pay for it with the full understanding that it was coming.

Randall Witte

I agree you need to charge for PF. Get a meter that reads KVA and kwh's and bill for for both..

if the power factor is unity, 1.0 = a pure resistive load. As you depart from 1.0, higher or lower the power company finds it has excessive out of phase currents that do not move the standard meter. These excess currents heat the wires and transformers, as well as saturate them from time to time. That means you cause the waste of their energy. Power factor metering is their way of making you pay. To avoid this, get a power factor correction device of the correct size for each machine that uses power. These can be capacitor banks or special low power synchronous motors made for the purpose. It pays you to correct, as once corrected the extra fees stop forever and you paid for it once. If you do not correct it, you pay forever, and it can be 5- 20% or more of your electricity bill.

the best thing to do would be to evolve a kVA based tariff instead of a kW tarrif system.

would probably involve many changes in the law but may well be the ultimate goal to work for.

Thanks for all of you

but so far, there is no real answer for the question. we can not impose KVA charge soon as it needs a significanr revision to the current tariff scheme. this may be done in the future. for the time being, we can use either:

1- adjusting the billing demand --- real demand = actual demand (Kwh)*(new PF/Old PF)

or

2- setting up a power factor multiplyers, for example:

0.8<=PF<0.9 === the bill amount will be multiplied by 1.05 for example.

and so one == 0.7<=PF<0.8 .....

the question is why 1.05, or 1.02 , or ..

what is the criteria of choosing these numbers:

is it the payback period of the installed capacitors .. for example 1 year. which means, multipliing the bill amount by 1.02 every month, the extra amount will pay for the capacitors after 1 year.

or there is another approach for choosing the parameters.

of course, there are another saving sources, but, I am just explaining the argument.

Hope to find answer.

Ayman

Then you must install the power factor correction at each clients machine to save you the money you cannot get via tariffs.

Hi,

We are all aware about the relation between Aparent Power (kVA), Active Power (kW) & Power Factor (PF) which is produced below :

kVA = kW/PF

From above, we can draw the following inference :

Since the equipment load (kW) is fixed, so from the above formula, as the PF decreases the kVA rating increases & inturn it affects the total installed capacity & cost thereby increasing the depreciation cost. This increase in depreciation cost has to be borne by the defaulter.

To my opinion, upto PF value of 0.95, no penalty shall be applied. Penalty shall be levied in case the PF goes below 0.95 & lower limit shall be 0.8. Below PF value of 0.8, the consumer shall be warned to improve their PF & ultimately disconnecting the consumer not fulfilling the requirement because it is the question of wastage of natural resources ultimately! However, the decision lies entirely on the concerned government.

From the above equation, we can find that increase in kVA rating for every reduction in PF value by 0.01 is approx 1.3% (average) till the PF value is 0.8. So, if one wants to recover the extra charges in 5 years, the penalty shall be levied @1.17% for PF 0.9, @2.47% for PF 0.85 & @3.95% for PF 0.8.

The above idea is based on my theoratical knowledge & not to relate to any tariff rules.

i can not give a numerical response for tarrif because i am unfamiliar with the methods followed at your end and costs of equipment and operation at your location.

however i shall explain the concept to you.

a multiplier applied to the power factor will not easily work.

Power Factor is the projected vector. the decrease in power factor (effect) does not have a linear relationship with the increase in the reactive power (cause).

as the PF goes lower, the unit decrement in PF is the result of increasing increments in the reactive vector. this results in higher costs of unit correction at lower power factor.

near unity power factor the costs of correction are almost nil. at power factor near to zero it would theoretically mean near to infinite costs of correction(!).

costs of unit correction are defined by capital costs of capacitors (or any other VAR correction equipment) and its connection, in addition to operation costs like additional heat losses in correction, indirect losses inside consumers premises due to sufference in quality of power, etc. the relationship follows the cotangent curve.

therefore the penaly would have to follow the same curve to be equitable as a deterrant to violators. the penalty imposed must always be greater than the cost of correction so that there is no incentive to the violating consumer to take the path of least resistance.

the penalty may even have a component that increases everymonth and finally reaches a point where the offender may be disconnected from the bus till he corrects his installation and gets it recertified.

all this sounds rather cruel to the uninitiated reader. however one must appreciate that poor power factor can affect equipment on the premises of all the neighbors on the same bus. it is therefore a social responsibility in addition to a economic consideration.

I Agree for the most part. I do not believe that a company should be disconnected from the buss. If an electric company, private or government, is working toward improving the Power Factor of a user, then they should be responsible for providing the equipment for that user and a means to pay for it in a reasonable time. The user is paying for a service. The user is not the one changing the rules. New Users should be limmited to equipment that meets the power factor requirments. For an electric company to come in "after the fact" and establish "Penalties" for existing equipment is just plain wrong. It will be better to give Incentives to companies that Improve thier PF. Over the long run, this will be a better solution and all will be happier.

Because this IS a social responsibility, encouragement will be a better solution than penaliteis.

Quote Electricayman

1- adjusting the billing demand --- real demand = actual demand (Kwh)*(new PF/Old PF) 2- setting up a power factor multiplyers, for example:0.8<=PF<0.9 === the bill amount will be multiplied by 1.05

How do you do this if you have no way to measure the PF? How do you know when a customer improves the PF?

Thanks for the responses particularly soebfatehi

Yes, we can measure the PF becasue we are using electronic meters.

our problem is that we have only one charge which is energy charge 12c/Kwh, and we need to use this for the power factor penalty.

Best regards

Ayman

Electricayman,

I congratulate you for asking the people of the industrial community for advise on this matter. It shows good common sense on your part.

Here is my point of view. A fair system would have each user pay for the costs of the energy he uses including the infrastructure costs.

This means the KWh plus the losses and distribution equipment oversizing required to supply the KVARs he uses (or produces). The KWh is easy to measure, the KVARh is also easy with the proper meter. The difference is that the KVARh only produces 1-5% losses in the distribution network but needs a 70-80% infrastructure increase.

It would be then fair to use something like: KWh + (KVARh * y%); y being 2 to 10

This way, your electrical users would pay for the real costs and act accordingly. It would be easy for them to evaluate if they should install PF correction equipment. There wouldn't be any litigation regarding on how long one can be below a certain limit and at what power it should be applied.

As an example, if you use the PF as a level for fix penalties, what happen if a plant is running idle with a low load but bad PF of 0.6? Should they be penalized for a whole month of power consumption when they normally have a PF of 0.85 at full load? One can add all kind of power threshold to apply the panalities but it becomes very complicated.

This is why they should have a price for cumulated KWh and a lower price for the cumulated KVARh.

Regards,

Marco

Ayman-

One of the most effective methodologies that I have come on is based on whatever your utility has established as its "design" basis for power distribution.

The specific utility used a 0.8 power factor as the "minimum acceptable" value- presumably what they designed their distribution system to support.

Their approach was to use the 0.8 as a baseline so that, if the customer had an observed load of 1000 kW with a 0.7 power factor, their bill was adjusted by dividing the observed by the current pF and then multiplying by the "goal" pF- 1000/0.7X0.8=1142.8 billed kW.

By the way, if the rate structure includes a tier system with the first tier based on some multiple of the demand (say 300 times kW for tier one) the "adjusted" kW was used to calculate the kWh in tier one, providing another incentive beyond the cost of paying for "demand" that did not appear to have been used.

This approach penalized the customer for the out-of-range pF for the offending month but gave them both the incentive and the time to correct it (capacitors, etc.).

Hope that this helps a little.

Randall Witte (rewitte@emc2conserv.com)

Thanks all for your concerns and answers. I hope I will work out something from these answers.

Regards