Electrical Utility Bill charges

Found this...

http://www.duke-energy.com/pdfs/110452-Understand-Bill-Guide-IN-WEB.pdf

Yes the power companies need to charge for total electric demand...as you know you have two kinds of power, real power and magnetizing current....the kvar charges you get should reflect total pf efficiency....these charges are to discourage poor efficiency in commercial usage...

With a power factor that high, that part of the bill is going to be small in comparison with other parts. Concentrate on energy efficiency across the installation instead - it will be effort spent in a more fruitful way.

The OP should ask the utility and also check the contract details and tariff details.

Make sure to find someone knowledgeable as the typical call center agent or accounting/billing people have now clue about how peak power, kVARh or so are metered and billed (they often even have problems explaining each tariff, in some cases tariff structures are very complicated and bills have lots of detailed positions with more or less obscure names).

Many companies don't bill reactive power as long as it does not exceed some maximum percentage of the billed active power over the same period. In many cases reative power peak is not taken into account, only the reactive energy is totalized.

" they fired all of their real accountants in favor ..." They're now using accountants experienced in the Aerospace and Petroleum Industry and minored in creative writing

Are you sure that is strictly a power factor charge, and not a DEMAND charge? Because a Demand charge, which often does include kVAR-Demand, it not reflective of the power factor, just the actual peak kVAR valu.

There's no secret about how you're billed, just look for the tariff applicable to your business, you'll find it right on your bill.

http://lge-ku.com/search/gss/commercial%20tariff

Looks like you're being billed under the PS (Power Service) tariff which has an interesting "Determination of Maximum Load" clause in it, see page 9.

It's looking like a conservation conversation is what the OP needs, Boss. If I were in those shoes, I would be looking at energy efficiency throughout the entire operation. Especially with a tariff like that. I bet there are some draughts, tungsten light bulbs, timeswitches and nagging to be done. Thrift is a good thing!

Most utility companies around the world have one policy that is "To loot the customers by any hook or crook method". It is same here in India. You are at their mercy as they enjoy monopoly.