Optimizing Power Factor Correction

The optimal investment for power factor correcting capacitors for Kansas Power and Light Company large power contract customers is studied. Since the billing capacity is determined by dividing the real demand by the power factor (the minimum billing capacity is based on 80 percent of the summer peak billing capacity) and the billing capacity is used to determine the number of kilowatt-hours billed at each pricing tier, the power factor affects both the demand and the energy charge. There is almost no information available in the literature concerning recommended power factor corrections for this situation. The general advice commonly given in the past has been that power factor should be corrected to above 0.9 if it is below that value to begin with, but that does not take into account the facts of the situation studied here. Calculations relevant to a commercial consumer of electricity were made for demands of 200, 400, 800, 1,600, 3,200, and 6,400 kW and monthly energy consumption periods of 100, 150, 200, 300, 400, and 500 hours for several capacitor purchase and installation costs. The results are displayed in a series of graphs that enable annual cost savings and payback periods to be readily determined over a range of commonly encountered parameter values. It is found that it is often economically advantageous to correct a power factor to near unity