A significant percentage of companies pay a fee/surcharge related to, what’s called, their Power Factor Rating in their monthly energy bill. Most don’t realize it. Unless the bill is way out of a normal range your company CFO, Controller, Accounts Payable, etc. staff aren’t familiar with energy bill terminology and this fee likely goes unnoticed.  

Most industrial facilities use induction motors to drive their pumps, conveyors, and other machinery. These induction motors cause the power factor to be inherently low for most industrial facilities. As a result, many electric utility companies assess a “power factor penalty” for a lower power factor (usually below 0.80 or 0.85). Some also incentivize a high power factor (above 0.95, for example).  Installing a power factor correction system, you can eliminate the power factor penalty from your bill.

We’ve found that most companies struggle to understand how Power Factor (PF) impacts demand charges. Frequently, those tasked with paying recurring charges will pay a significant premium each month in demand charges because their PF is below a threshold set by the utility. Oftentimes it’s not obvious when there are extra charges associated with a low PF on the statement. 

Energy Efficiency Group was created to help companies address the problems of operational inefficiencies that cause these penalties. We partner with your company to make your systems operate with energy efficiency. 

A majority of companies have facilities that have a low Power Factor rating but don’t know it. We provide a complimentary service that analyzes your utility use and will let you know exactly what your Power Factor rating is- and if we can save you capital resources.  

Contact us today to start the conversation!