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Power factor and your bill

Some customer types, mainly business customers, will see a power factor surcharge on their bill if their power factor is below 90%. This surcharge is not applicable to our residential rates. 

What is power factor?

Power factor refers to the ability of your electrical system to convert electric current into useful work such as heat, light, and mechanical motion. To use electrical power efficiently your system should draw mostly real power, measured in kilowatts (kW), from our system. If your equipment draws too much reactive power, measured in kilovolt-amperes-reactive (kVAR), it can't perform work as efficiently and limits the capacity of our lines to deliver real power and quality voltage to your facility. 

The total power your facility draws, also called apparent power, is the square root of the sum of the squares of real and reactive powers. The ratio of real power to total power is called power factor, and your equipment is performing best when that ratio is between 90% and 100%.

To calculate power factor we use the following formula:

Power factor = kV/kVA.

Poor power factor at your site can cause voltage fluctuations and power quality issues for neighbouring facilities, which negatively affects their equipment. It also limits the capacity of our lines to deliver energy to you and to our other customers. To counteract these effects we need to install capacitors on our system to use our lines efficiently and to maintain power quality for all customers on the line.

When your power factor is below 100% your facility is drawing both reactive power and real power. However, the energy charges (cents per KWh) applied to your account only reflects the cost of providing you with real power you have consumed.

A power factor surcharge is applied to your account when your power factor is below 90%. It is used to recover the cost of supplying reactive power to you, which isn’t included in other charges.

If your average power factor for the billing period falls below 90%, your bill will be increased by the following percentages, which are applied to the total of all other charges for the same period.

Power factor
Power factor allowance Surcharge
100% but 90% or more
90% but 88% or more 2%
88% but 85% or more 4%
85% but 80% or more
80% but 75% or more
but 70% or more
70% but 65% or more
65% but 60% or more 44%
60% but 55% or more
55% but 50% or more

Refer to your bill details to see the percentage and amount of the surcharge if your power factor has fallen below 90% for the bill period.

Large inductive loads such as power transformers and electric motor driven loads such as fans, pumps and air compressors may cause poor power factor. Additionally, loads that draw current in a non-linear fashion, such as variable speed drives, computers, broadcasting equipment, compact fluorescent and LED lighting, electrical chargers, induction furnaces and many other devices may also contribute to low power factor in a customer's system.

Good places to start your investigation are:

  • Large fans and motors (especially if they are only partially loaded).
  • Equipment with a high number of transformers (such as lighting ballasts).
  • Failed or improperly sized capacitors (used for power factor correction).
  • Harmonics in a system caused by non-linear electrical loads.

Depending on the cause of your low power factor, there are different solutions that may be appropriate. Some examples are:

  • Capacitors can be installed in your electrical system when the cause of the poor power factor is a linear inductive load, such as an electric motor driving a fan. Capacitors produce a leading power factor to counteract the lagging power factor of inductive loads.
  • Harmonics filters may be needed in your system to improve power factor if the cause is a non-linear load.
  • Sometimes operational changes in a facility are all that are needed to improve power factor. For example, you can operate a motor closer to the full-load rating.

A qualified electrical contractor can provide power factor correction services and/or equipment. You may have an electrician on staff or one you already work with who can do this for you.

We can also provide referrals through our Alliance of Energy Professionals, which includes qualified contractors that can help you optimize your power factor.

Improving on a low power factor may help you:

  • Reduce electricity bills by eliminating power factor surcharges.
  • Enhance equipment operation by improving voltage.
  • Improve energy efficiency of your electrical system by reducing line losses.
  • Eliminate or reduce transformer maintenance or upgrades.

Please call us at 1 800 BC HYDRO (1 800 224 9376).

Our call centre hours are:

Monday to Friday: 7 a.m. to 8 p.m.

Saturday: 9 a.m. to 5 p.m.

We're closed Sundays and holidays.