How to Perform a Power Factor Study – kVA Demand Rate

Jim Phillips, P.E.

DSC02142A power factor study is a key to properly determining a system’s power factor correction requirements. A study determines capacitor size and location as well as the number of steps and incremental sizes to be switched. A study also provides an economic analysis of the proposed installation based on the forecast reduction in electric utility bills. A power factor study can be divided into three major steps.

▪ Review of the electric utility company’s rate structure.

▪ Development of a graphical profile of the facilities kVA, kW and kvar.

▪ Determination of the required capacitor kvar additions for the desired power factor improvement level.

The power factor study begins with a utility rate structure review together with a historical sample (six to 24 months) of electric bills. This information is used to evaluate present use patterns and to determine the potential economic benefits of improving power factor. Utility rate structures usually provide significant economic incentives to reduce total kVA demand.

Typical demand charges can vary from minimal to $20 per demand kVA, so for reducing a demand by just 100 kVA with a demand charge of, let’s say, $10 per kVA could save $1,000 per month. It’s easy to see that larger demand reductions and higher demand charges could potentially large savings. After reviewing the rate structure and billing history, a detailed graphical profile of the facility’s use over typical 24 hour operating periods should be developed.

The profile could be created from recorded kW and kVA data and either calculated or recorded power factor and var data. This data is obtained from on –site monitoring over several 24 hour periods. Some utilities are prepared to provide this data. However, independent monitoring usually is necessary using a commercially available energy analyzer to record demand, power factor and total energy use. The data is used to develop the graphical profile which is plotted with respect to time to provide a representation of a complete operating cycle. This profile can then be used to determine the required kvar of capacitors necessary and the number of Switching steps to offset the inductive kvar.

The minimum reactive kvar determine the amount of capacitors that can be used without switching to provide close to 100 percent power factor during minimum load conditions. Additional capacitor requirements can be determined based on the profile and sized as needed. Capacitance is introduced into the facilities electrical distribution system to balance inductance due to equipment operation. When equipment load, and subsequently inductance decreases, capacitance also should be reduced. For more erratic demand patters, more switching steps may be required.


NFPA70E 2018 Update video by Jim PhillipsAbout Jim Phillips, P.E.: Electrical Power and Arc Flash Training Programs – For over 30 years, Jim Phillips has been helping tens of thousands of people around the world, understand electrical power system design, analysis, arc flash and electrical safety. Jim is Vice Chair of IEEE 1584 and International Chairman of IEC TC78 Live Working. He has developed a reputation for being one of the best trainers in the electric power industry, Learn More.

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