Power Factor

Power factor is the measure of the relationship between reactive (reactive kilovolt ampere hour or RKVAH) and active components of energy used (kilowatt hours), expressed as a percentage.

The important thing to remember about power factor from a rate standpoint is that higher is better. Hoosier Energy will charge your system a penalty if power factor drops below 93%, and most distribution systems charge large power customers a similar penalty. Your wholesale bill identifies power factor for each substation for each billing period.