Power Factor on Ohio Electric Bills: What It Costs
The short answer
Power factor is the ratio of real power (kW, which does work) to apparent power (kVA, which the utility's equipment must carry). Motors, welders and older lighting ballasts draw extra reactive power (kVAR) that does no work but still loads the wires. When a facility's power factor is low — commonly below 0.90 — some Ohio business rate schedules bill demand on kVA or add a power-factor adjustment, so you pay for capacity you didn't use.
This page explains the concept and how it shows up on bills. If you're sizing a capacitor project, see the power factor correction project playbook.
kW, kVAR and kVA in one picture
Think of a beer mug: the liquid is kW (real power), the foam is kVAR (reactive power), and the whole mug is kVA. Power factor is liquid ÷ mug.
| Real power (kW) | Reactive power (kVAR) | Apparent power (kVA) | Power factor |
|---|---|---|---|
| 400 | 100 | 412 | 0.97 |
| 400 | 200 | 447 | 0.89 |
| 400 | 300 | 500 | 0.80 |
At 0.80 power factor, the utility has to deliver 25% more kVA than the kW you actually use.
How power factor can reach your bill
Tariff language differs by utility and rate schedule, but it typically works one of three ways:
- kVA billing demand. Demand is billed on kVA instead of kW, so poor power factor directly inflates the demand charge.
- Power-factor adjustment. Billing kW is multiplied up when power factor falls below a threshold (for example, 85% or 90%).
- Reactive demand charge. A separate charge per kVAR above an allowance.
Small commercial schedules often have no power-factor provision at all. Look on your bill and in your rate schedule for "kVA," "kVAR," "power factor" or "reactive." If none appears, correction won't lower that bill directly — although it can still reduce losses and free up transformer capacity.
Which facilities have low power factor
- Plants with many lightly loaded induction motors (conveyors, fans, pumps running below rating).
- Welding and induction-heating shops.
- Older fluorescent or HID lighting with magnetic ballasts.
- Facilities with variable-frequency drives can see harmonics rather than classic low power factor — a different problem that simple capacitors can make worse.
How to check yours
- Your bill: some Ohio utilities print kVA or power factor for demand-billed accounts.
- Your interval data: utility portals may include kVAR or kVA channels for larger meters.
- A power quality logger: an electrician can log a week of data at the main service to see power factor and harmonics together.
FAQ
What is a good power factor for a business?
0.95 or higher is generally considered good; many tariffs start adjusting bills below 0.85–0.90.
Does power factor affect my electricity supplier's price?
Usually not directly — supplier prices are per kWh. The effect is on the utility's demand charges where the tariff bills kVA or adjusts for power factor.
Will LED lighting improve power factor?
Quality LED drivers typically have high power factor, so replacing old magnetic-ballast lighting often helps a little. Motors are usually the bigger lever.
Is power factor the same as load factor?
No. Load factor compares average demand to peak demand over time; power factor compares real power to apparent power at a moment in time.