Power Factor Rating (if billed on kVA/kVAR)
When looking at your utility bill, if you notice that all your demand charges are based on kW, then skip this post does not apply to you. However, if you notice that your demand charges are based on kVA or kVAR, then keep on reading! Power Factor is the difference between kW and kVA.
To put those words in context, next time you go to the bar and order a beer, look at the glass. kW is equivalent to the liquid beer; kVA is equivalent to the foam on top; the ratio of beer to foam is equivalent to the Power Factor rating. Using this analogy, the liquid beer can be consumed, while the foam cannot, or at least not as easily. Translating this back to kW and kVA; kW is “real power” and is consumed by operations; kVA is “apparent power” and is waste energy that is not consumed by operations, but rather by inefficient equipment (e.g., induction motors).
If you notice that you have a low Power Factor rating, or high kVA demand compared to kW demand, you are paying a penalty each month for inefficiently consuming power. To stop the financial bleed, capacitors can be installed at the facility to help correct the inefficiencies and bring the Power Factor as close to a perfect 100% as possible. This in-turn will lower monthly demand charges and in some cases, historical demand ratchet charges as well.
Tax Charges/Credits
Tax exemptions and tax credits are commonly overlooked by consumers not familiar with their State laws and manufacturing incentive programs. Depending on the company’s assigned SIC/NAICS code, or tax exemption status (e.g., not-for-profit organizations), companies could be over paying tens of thousands of dollars in annual taxes or overlooked tax credits. These tax exemptions and credits may also pertain to 3rd party supply agreements, providing additional savings potential. Working with a knowledgeable energy partner to find these costs can help prevent future overpayments, while also potentially helping to achieve a credit for past overpayments.
Are you overpaying? Request a complimentary building evaluation to obtain a detailed billing analysis highlighting your savings opportunities.