I know that there has been a lot of discussion about Power Factor Correction and whether or not it can reduce energy costs. The general consensus seems to be that it may only reduce consumption in very small amounts as it relates to I2R losses (Line losses).
Below I have pasted an example of calculations used to show how consumption is reduced through the proper application of power factor correction (PFC). Can anyone tell me if the example below is valid?


When it comes to the argument of whether or not PFC works to reduce expenses, it has been explained to me that the usual sticking point is the first assumption that by simply reducing current or amps then we should see a reduction in watts (this is what the client is being billed for). If that is all that was happening then, obviously, there would be no reduction in kWh. The second issue is the designed efficiency vs. actual "in field" efficiency. They are not the same. Over sized motors, unsized conductors relative to line losses and poor power factors are much more prevalent than most would believe.
Many stop only at the first calculation and state that PFC does not reduce energy costs because any reduction in amperage is offset by the increase in PF. It is only when all three formulas are applied that the true gains in efficiency are realized. When these conditions and parameters are applied to the calculations as laid out in these calculations, one can quickly see the impact and potential savings that can be attained.
It is true that there are a lot of cases where PFC is misapplied, savings are way overstated and snake oil salesman are pushing a product that many don't need. However, it seems that based on these calculations, there are many instances whereby savings can be had. Any unbiased, intelligent comments and input would be appreciated. Thanks.
"Almost" Good Answers: