Load Factor

The ratio of the average load supplied during a designated period to the peak load occurring in that period, in kilowatts. Simply, the load factor is the actual amount of kilowatt-hours delivered on a system in a designated period of time as opposed to the total possible kilowatt-hours that could be delivered on a system in a designated period of time. Utilities are generally interested in increasing load factors on their systems. A high load factor indicates high usage of the system’s equipment and is a measure of efficiency. High load factor customers are normally very desirable from a utility’s point of view. Using a year as the designated period, the load factor is calculated by dividing the kilowatt-hours delivered during the year by the peak load for the year times the total number or hours during the year.