Power Factor Surcharge

Power Factor Surcharge

Power factor surcharge is imposed when your power factor is less than 0.95 (electricity supply above 132 kV) or less than 0.85 (electricity supply below 132 kV).


    How it is Calculated

    Power factor surcharge for customers with electricity supply below 132 kV is calculated as follows:-
    • 1.5% surcharge of the current bill – for every 0.01 less than 0.85 power factor.
    • 3% surcharge of the current bill – for every 0.01 less than 0.75 power factor.

    Example 1:-

    Current bill: RM2,000
    Power Factor = 0.80
    Surcharge    = [(0.85 – 0.80) / 0.01] x 1.5% x RM2,000
    = RM150

    Example 2:-

    Current bill: RM2,000
    Power Factor = 0.75
    Surcharge    = [(0.85 – 0.75) / 0.01] x 1.5% x RM2,000
    = RM300

    Example 3:-

    Current bill: RM2,000
    Power Factor = 0.60
    Surcharge    = [((0.85 – 0.75) / 0.01) x 1.5% x RM2,000]  +  [((0.75 – 0.60) / 0.01) x 3% x RM2,000]
    = RM750

    What is Power Factor

    Power Factor is an index used to compute the efficiency level of electricity usage.  The index is measured from 0 to 1. A higher index shows efficient usage of electricity and vice versa. Low power factor shortens the lifespan of electrical appliances and causes power system losses to TNB.
    To understand power factor, we will start with the definition of some basic terms:-
    KW Working Power (also called Actual Power, Active Power or Real Power).
    It is the power that powers equipment and performs useful work.
    KVAR Reactive Power.
    It is the power which magnetic equipment such as transformers, motors and relays need to produce the magnetizing flux.
    KVA Apparent Power.
    It is the vectorial summation of KVAR and KW.
    Let’s look at a simple analogy in order to better understand these terms.
    Let’s say you are at a park and it is a hot day. You order a glass of a carbonated drink. The thirst-quenching portion of the drink is represented by KW.
    Unfortunately, along with your drink comes a little bit of foam. The foam does not quench your thirst. This foam is represented by KVAR.
    The total content of your glass, KVA, is this summation of KW (the carbonated drink) and KVAR (the foam).
    Power Factor is the ratio of Working Power to Apparent Power.
    Power Factor = KW / KVA
    Looking at our carbonated drink analogy, power factor is the ratio of carbonated drink (KW) to the carbonated drink plus foam (KVA).
    Power Factor     = KW / (KW + KVAR)
    = Carbonated drink / (Carbonated drink + foam)
    Thus, for a given KVA:-
    i. The more foam you have, the lower your power factor.
    ii. The less foam you have, the higher your power factor.
    For efficient usage of electricity, power factor must approach 1.0.  Power factor that is less than 0.85 shows inefficient use of electricity.
    Calculation for Power Factor =            KW           
    √(KW2  +  KVAR2)

    Causes of Low Power Factor

    In our carbonated drink analogy, low power factor resulted when the foam is large. Low power factor is caused by inductive loads, which are sources of reactive power.   
    Examples of inductive loads are:-
    • Transformers
    • Induction motors
    • High Intensity Discharge (HID) lighting
    Inductive loads constitute a major portion of power consumed by commercial and industrial sectors.

    How to Improve Your Power Factor

    Customers are advised to follow these steps:-
    • Install capacitors (KVAR Generators)
      • Capacitor
      • Corrector
      • Synchronous generators
      • Synchronous motors
    • Minimise operations of idling or lightly loaded motors.
    • Avoid operating equipment above its rated voltage.
    • Replace standard motors as they burn out with energy efficient motors. 

    Benefits of Improving Power Factor

    Benefit 1: Reducing KW billing demand
    Low Power Factor requires high reactive power (KVAR) and apparent power (KVA), which is the power that TNB supplies. Therefore, a facility’s low power factor forces TNB to increase its generation and transmission capacity in order to handle this extra demand.
    By increasing power factor, customers use less KVAR.  This results in less KW, which equates to RM savings for TNB.

    Benefit 2:  Eliminating power factor surcharge
    Utility companies all around the world charge customers an additional surcharge when their power factor is less than 0.95. In fact, some utilities are not obliged to deliver electricity to their customers at any time the customer’s power factor falls below 0.85.
    Thus, customer can avoid this additional surcharge by increasing power factor.  In Malaysia, TNB is allowed through the Malaysian Grid Code and the Malaysian Electricity Distribution Code, to impose a surcharge to the customer if the power factor is <0.85 for customers receiving less than 132kV .

    Benefit 3:  Increased system capacity and reduced system losses in your electrical system
    Low power factor causes power system losses in the customer’s electrical system. By improving power factor, these losses can be reduced.  With the current rise in the cost of energy, increased facility efficiency is important.  Moreover, with lower system losses, customers are able to add additional load in their electrical system.  

    Benefit 4: Increased voltage level in your electrical system, resulting in more efficient motors
    As mentioned before, low power factor causes power system losses in customer’s electrical system. As power losses increase, customer may experience a voltage drop. Excessive voltage drops can cause overheating and premature failure of motors and other inductive equipment.
    Therefore, by raising the power factor, customers can minimize these voltage drops along feeder cables and avoid related problems.  Motors will run more efficiently, with a slight increase in capacity and starting torque.