# Why won't power utility company charge for kVA instead of kW

## Main Question or Discussion Point

Hello all,

As I understand (and realize when looking at my electricity bill) it seems all power utility company (in residential market) only charge for kW not kVA. But somehow I find it a bit weird when I think about it more deeply.

Wouldn't it make more sense to charge for kVA ? Otherwise, it seems that I could be drawing an "unlimited" amount of VARs (huge inductive currents for example) assuming my power factor to be zero (or close to) and not be charged a single dime? I understand this is very unlikely in households to have say only inductive or capacitive loads, but for the sake of this discussion, what am I missing in my reasoning? Are they statistically assuming that all households have usually great P.F (close to one) and so figure kW ≅ kVA

Are kVA meters only installed in industrial markets?

Related Electrical Engineering News on Phys.org
russ_watters
Mentor
You don't get charged for vars because they cost very little to produce - they only affect the equipment/wire sizing. KW/kwh is what determines how big the prime mover needs to be and how much fuel (or wind, sunlight, water) it consumes.

cnh1995 and anorlunda
Thanks russ,

When you say "only affect the equipment/wire size", wouldn't that be enough to justify charging me those huge purely inductive current I'm drawing? In theory, that wire size could be infinitely huge... just a thought :)

My understanding is that they have kVA meters for industrial premises..(TBC) Otherwise what would be the point of correcting the power factor if at the end of the day they only charge me for kwatts I'm using no matter how inefficient my installation is.

russ_watters
Mentor
When you say "only affect the equipment/wire size", wouldn't that be enough to justify charging me those huge purely inductive current I'm drawing? In theory, that wire size could be infinitely huge... just a thought :)
I suppose, but they only need to pay for wires once. There is also the resulting resistance loss from the higher current, but that is pretty small.

Thinking about it more, and with your remindet most commercial rates do include a penalty for bad power factor - I believe it is ratiod onto the demand charge. For residential it probably isn't worth the effort to meter.

Thing is, you can't do anything with a var so there is no incentive to try to draw them.

cnh1995
yep, that was my thought.

russ_watters
Mentor
You're welcome!

vk6kro
Power companies would love to charge for reactive current. Customers would object that they get no value from this so why should they pay for it?

Imagine you were buying lobsters and the lobster dealer put them in a heavy wooden box before weighing them.

Lobsters are expensive but wooden boxes are heavy and relatively cheap.
So, you could insist that the weight of the box be subtracted so that you only pay for the lobsters.
The boxes can be returned when they are empty.

Reactive current is like the box. It is necessary to deliver the power you want, but the power company gets it back later in the cycle.

Averagesupernova and PhysicoRaj
rbelli1
Gold Member
The boxes can be returned when they are empty.
But the lobster dealer must purchase and maintain the boxes. If your lobsters require particularly robust (thus expensive) boxes then you are generating less profit for the dealer.

BoB

Large scale industry operates thier own substations with capacitor banks to correct the power factor.

jim mcnamara
Mentor
@anorlunda - could you comment on some of the content here? Thanks. kVARs are commonly shown on large power bills with demand meters.

FWIW- demand is an ongoing cost of business for distributors, and in New Mexico PNM charges for kVARs. for example. High demand was a deal breaker for San Luis Valley Electric Coop. SLV has a lot of accounts for irrigation and chemigation (potatoes). If every account on a distribution line were to flip the on switch over a small period of time demand costs for the coop would go through the roof. They worked out agreements among users so that there is no overlap in time of use. If demand were a problem everybody on that line would get a huge financial kick in the butt. Works really well.

If you ever go to Alamosa CO, go to one of the potato coop stores. Wonderful potatoes.

cnh1995
anorlunda
Staff Emeritus
@jim mcnamara , There is merit in what you say.

There are lots of reasons why VAR billing is unusual. @russ_watters gave the primary one, MWH is more directly tied to costs.
But I think the other big reason is purely silly.

If we were to charge the public for imaginary power, then we would become objects of ridicule from every state legislator, every public service commission lawyer, and every pundit, late night comic, and loudmouth on TV. We would be given Golden Fleece awards. Imagine the chaos in the billing department if one of every 1000 ratepayers, sent us a check for imaginary money to pay for his imaginary power. Ha ha LOL.

With "large bills", we deal with engineers and plant managers, who won't treat it like a big joke. We can negotiate VARs as part of the interconnection agreement. The politicians and TV comics don't read or understand these contracts, so it doesn't get silly.

But with my engineer's hat on, and silliness aside, if I charge money for KVAR, then customers feel entitled to use what they want as long as they pay. I would rather put in a relay with a hair trigger to trip loads using excessive KVAR than to send a big bill. In fact to invent a different kind of silliness, it would be nice to shift the burden and expense of voltage control to customers. In the past, that could never happen, but in tomorrow's world with aggregation of homeowner/community owned distributed generation (I'm thinking of NY's REV) , it could become a part of the interconnection agreement.

Jason R Carrico and cnh1995
jim hardy
Gold Member
2019 Award
Dearly Missed

Utilities grew out of the depression when "square dealing" was the norm.
Florida Power and Light started as an Ice company selling a little bit of their internally generated electricity to folks who lived close to the ice plants.
.
Most of a tiny 1930-ish utility's revenue stemmed from conversion of energy from coal or oil or even sawdust into kilowatt-hours and that's what they sold. It would have been deemed unconscionable to charge one's neighbors for something that cost nothing to produce.

I had the good fortune to know some of those "old timers" . Think "Old fashioned value system"..........

old jim

In general Residential customers can only be billed for Power, not VARS by law. Large industrial customers can and do get billed a VAR surecharge, ether for VAR demand or KVARH - or both.

If you has very high VAR demand at you home that does not help you in any way, any useful purpose would result in real power, Watts. If for example you had a large inductor on the line, you are just creating and collapsing a magnetic field, as soon as you try to use that field you have real power used. Also - the efficiency, or heat losses from the current in the conductor you will be billed for, since this also is REAL power. So there is some motivation to use more efficient appliances.

When you say "only affect the equipment/wire size", wouldn't that be enough to justify charging me those huge purely inductive current I'm drawing? In theory, that wire size could be infinitely huge... just a thought :)
I suppose, but they only need to pay for wires once. There is also the resulting resistance loss from the higher current, but that is pretty small.

Thinking about it more, and with your remindet most commercial rates do include a penalty for bad power factor - I believe it is ratiod onto the demand charge. For residential it probably isn't worth the effort to meter.

Thing is, you can't do anything with a var so there is no incentive to try to draw them.
Can we put an estimate to those increased system losses?

I recall discussing this with people about how not all of the residential $savings (based on watts) in a CFL translated to lower fossil fuel usage at the power plant, because of the power factor. I've heard an estimate of ~ 8% average losses in the national grid (North America). I'm not sure how much of that is IR losses, I guess some is transformer conversion losses, but I don't know how much. But if a CFL has a PF of 0.5, it will draw 1.414 x the current, and losses are I^2 x R, so 2 times the loss (of some of that 8%). But I also wonder about the generation side. I don't know the efficiency of large alternators, but I'd assume mid-high 90's? How much of that loss is from current? So those losses might be nearly doubled as well? I'd also heard the argument that CFLs are a capacitive PF, while our homes are full of inductive PF (motors), so the CFLs were actually helping to normalize the grid. But I reasoned if that were true, there would be no motivation to design CFLs with PF closer to one, and I recall a push for this. The same applies to LEDs, I assume their switching circuits are capacitive as well to store energy between full-wave rectified peaks to reduce flicker. russ_watters Mentor Can we put an estimate to those increased system losses? Maybe when I can put some more thought into it, but I do have a short answer: I recall discussing this with people about how not all of the residential$ savings (based on watts) in a CFL translated to lower fossil fuel usage at the power plant, because of the power factor.

I've heard an estimate of ~ 8% average losses in the national grid (North America). I'm not sure how much of that is IR losses, I guess some is transformer conversion losses, but I don't know how much. But if a CFL has a PF of 0.5, it will draw 1.414 x the current, and losses are I^2 x R, so 2 times the loss (of some of that 8%).
I've never heard of anyone considering the impact on grid power loss when doing the change-over from inc to cfl, so before you add back in the loss due to the reactive current, you first have to subtract the savings due to the lower active current!

Suffice to say, once you include both, you'll find the net savings has gone up, not down.
I'd also heard the argument that CFLs are a capacitive PF, while our homes are full of inductive PF (motors), so the CFLs were actually helping to normalize the grid. But I reasoned if that were true, there would be no motivation to design CFLs with PF closer to one, and I recall a push for this.
No, they are inductive.

Maybe when I can put some more thought into it, but I do have a short answer:

I've never heard of anyone considering the impact on grid power loss when doing the change-over from inc to cfl, so before you add back in the loss due to the reactive current, you first have to subtract the savings due to the lower active current!

Suffice to say, once you include both, you'll find the net savings has gone up, not down.

No, they are inductive.
Sure, they save overall, I was just saying they don't save as much as the residential $savings would indicate. Due to these losses, russ_watters Mentor Sure, they save overall, I was just saying they don't save as much as the residential$ savings would indicate. Due to these losses,
Let me try again: if a CFL uses 20% as much active power as the incandescent it replaced, the savings at the power plant is greater, not less, once the power line loss is included.

Let me try again: if a CFL uses 20% as much active power as the incandescent it replaced, the savings at the power plant is greater, not less, once the power line loss is included.
Of course.

My point is that if someone buys a CFL/LED that uses 20% the watts of a comparable incandescent (but has a PF ~ 0.5), they may assume that the fossil fuel plant uses 20% of the fuel to power that CFL/LED versus a filament bulb. I'm trying to estimate the additional losses, to say that maybe it takes 25%, 30% or ? Sure, it still makes good sense to make the change, but just how much, from a supply viewpoint?

russ_watters
Mentor
Of course.

My point is that if someone buys a CFL/LED that uses 20% the watts of a comparable incandescent (but has a PF ~ 0.5), they may assume that the fossil fuel plant uses 20% of the fuel to power that CFL/LED versus a filament bulb. I'm trying to estimate the additional losses, to say that maybe it takes 25%, 30% or ? Sure, it still makes good sense to make the change, but just how much, from a supply viewpoint?
Still not getting it. If the CFL draws 20% (btw, bad estimate on my part; it is more like 25%...), the power plant sees it drawing less than 20% as much, not more than 20% as much. It's because:
1. The line loss is on top: the 100W Inc draws 108W from the power plant.
2. The loss is a square function, not a linear proportion.

Jason R Carrico
anorlunda
Staff Emeritus
you first have to subtract the savings due to the lower active current!

Suffice to say, once you include both, you'll find the net savings has gone up, not down.
Spot on. You hit the nail on the head Russ. And it goes double when switching to LEDs. Some utility engineers wrung their hands about harmonics because LED controllers are non-linear. But when it was pointed out how much they reduce the real power, the harmonics worries dissapeared.

@NTL2009 you're trying too hard. The kinds of losses you're talking about are small potatoes; too small to worry about.

russ_watters
Mentor
Ok, some numbers:
A 26W CFL replaces 100W incandescent. 120V each and lets assume a bad 50% power factor for the CFL and 8% line loss in the power company's transmission system pre-retrofit. Let's also assume the system is a nuclear plant with a half million volt transmission line, 1000 MW generated and 920 delivered (exact numbers), or 1062.3244953 amps delivered.

So when you install the CFL you get 26W delivered, or 1062.3244098 amps in the transmission line. Because of I^2R, you actually save an additional 12.87 Watts. Why is that more than 8 Watts? Because you aren't just saving the 8 W lost to serve the light; you are saving some loss on the power that is left in the line as well.

But what if the power factor is 0.5? That increases the CFL's amperage by 100%, which makes your amperage delivered now 1062.3244398 amps. Now the additional savings is "only" 8.36 W.

So, when switching from a 100W Inc to a 26W CFL, you save 74W but the power company saves:
87W if you include the line loss.
82W if you include the line loss and power factor's contribution to it.

Btw, here's an example of what you were referring to (I hadn't seen the argument before, but it popped up when I googled "cfl power factor):
Unlike commercial customers, residential energy users currently aren't charged extra to compensate for loads with low power factors. “The end-users don't fully realize that these low power factor compact fluorescents are not using the small amount of energy that they think,” [Doreen LeMay Madden, founder and principal designer for Lux Lighting Design, Belmont, Mass., and chairman of the Residence Lighting Design & Application for the Illuminating Engineering Society of North America (IESNA), New York] says. “They're using twice the amount of energy, plus they're causing distortion in the sine wave. The lower the power factor, the more distortion you get.”
Just awful.

http://ecmweb.com/lighting-amp-control/hidden-costs-c

russ_watters
Mentor
So, when switching from a 100W Inc to a 26W CFL, you save 74W but the power company saves:
87W if you include the line loss.
82W if you include the line loss and power factor's contribution to it.
Btw, if that was too much complexity you can assume your light bulb is the only thing on the line and calculate it that way. Then it is:
81.5 W if you include the line loss.
78W if you include the line loss and power factor's contribution to it.

NTL2009
anorlunda
Staff Emeritus
Russ, that source you quoted confused power factor with harmonic distortion.

Here's a wiki discussion of both PF and harmonics in the same paragraph.

https://en.wikipedia.org/wiki/Compact_fluorescent_lamp#Energy_efficiency said:
The input stage of a CFL is a rectifier, which presents a non-linear load to the power supply and introduces harmonic distortion on the current drawn from the supply.[52][53] The use of CFLs in homes has no appreciable effect on power quality, but significant quantities of them in a large facility can have an impact. The power factor of CFLs does not significantly affect their energy-saving benefits for individual consumers, but their use in large numbers—such as in commercial applications or across millions of homes in a distribution system—could require infrastructure upgrades.
Once again, the same goes for LED lights. They too are non-linear, but they too reduce the real power even more.

jim hardy
Gold Member
2019 Award
Dearly Missed
Some utility engineers wrung their hands about harmonics because LED controllers are non-linear. But when it was pointed out how much they reduce the real power, the harmonics worries dissapeared.
Nowadays electronic gizmos like consumer appliance power supplies include "power factor correction" circuitry that makes even a capacitor input switching power supply appear resistive, greatly reducing pesky harmonics.

https://www.mag-inc.com/Products/Powder-Cores/Power-Factor-Correction

http://www.powerelectronics.com/content/simplifying-power-factor-correction-smps

https://us.tdk-lambda.com/ftp/other/pfc_switchmode_powersupplies.pdf

https://www.fairchildsemi.com/application-notes/AN/AN-42047.pdf

Jason R Carrico and dlgoff
dlgoff
Gold Member
Nowadays electronic gizmos like consumer appliance power supplies include "power factor correction" circuitry that makes even a capacitor input switching power supply appear resistive, greatly reducing pesky harmonics.

https://www.mag-inc.com/Products/Powder-Cores/Power-Factor-Correction

http://www.powerelectronics.com/content/simplifying-power-factor-correction-smps

https://us.tdk-lambda.com/ftp/other/pfc_switchmode_powersupplies.pdf

https://www.fairchildsemi.com/application-notes/AN/AN-42047.pdf
Nice references Jim. Thanks. The conclusion in the fairchild application notes is very relevant.
Power companies do not get excited over low power factor driven devices, plus the extra cost of unused or wasted power can be quite large.

jim hardy