Power factor correction
Short answer. Power factor correction is worth acting on only after you separate the energy you can shop or avoid from the delivery charges and fees you cannot. This page explains the mechanism, the bill lines, and the checks that keep a quote from outrunning the contract.
A closer look at Power factor correction
Power factor correction belongs on a commercial tariff. Separate energy in kilowatt-hours from demand in kilowatts before you talk about a supplier. A one-cent supply cut can be smaller than a single 15-minute peak.
Demand is often the highest average draw in a 15-minute interval. A ratchet can keep a share of a past peak on later bills. Read the tariff. The supplier does not waive a utility demand charge.
Interval data tells you whether the peak is a startup, a weather event, or equipment that should have been off. A monthly total hides that. Ask the utility for the interval file before you buy a control system on a hunch.
Full-requirements fixed supply, an index plus an adder, and utility default service are different products. Compare them only after you list which riders are included. A quote that excludes capacity or transmission is not cheaper until those lines are added back.
Bandwidth clauses rebill you when usage swings. A restaurant, a hospital, and a three-shift plant do not have the same shape. Give bidders the shape you actually run.
An illustration, not a bid: 650 kilowatt-hours at 7 cents is 46 dollars of energy. A demand charge is additional and is not in that product. Use the rate class on the bill.
What to verify before you act
Write down the utility name, the account name, the supply price or default price, and a typical month of use. Power factor correction does not change those four facts. If a contractor, a supplier, or a city page disagrees with the bill, the bill wins. Shop Energy Prices does not sell electricity and does not keep a live rate table.
Use one official source for the benchmark: the price to compare or default service on the bill, the state shopping site if your state publishes one, or the commission docket that sets the default. EIA’s national averages are context for scale. They are the wrong number to beat.
Keep the contract PDF. Circle the term, the fee to leave, the renewal rule, and any pass-through that is not fixed. A verbal match to a competitor is not the product. If you are inside a cancellation window, follow the written notice method the same day and keep a copy.
Questions people ask
What does Power factor correction change on the bill?
It changes the line this subject actually controls: supply, a rider, equipment runtime, or an export credit. It does not, by itself, remove delivery, taxes, or a fee the tariff still lists.
Where do I get the number to beat?
Use the price to compare or default supply price on your bill, or the commission’s posting for your utility. National average prices mix delivery and supply and are the wrong benchmark.
Can the figures on this page be used as a quote?
No. Any arithmetic here is an illustration with round inputs. Your tariff, your kilowatt-hours, and the contract you are about to sign are the quote.
Working the decision for this account
Start a one-page worksheet titled Power factor correction. Column one is the current arrangement: utility, rate class, supply price, term end date, and last month’s kilowatt-hours. Column two is the alternative: the offer or the equipment quote, with every fee written beside it. Column three is the difference at your usage, after the fee to leave the current contract if there is one.
If column three is not a positive number you are willing to rely on, do nothing. Default service, the current contract, or the current equipment remains a valid outcome. Power factor correction is not a reason to accept a teaser, a gift card, or a verbal promise that the PDF does not contain.
File the PDF and the worksheet together. When the term is within 60 days of ending, or when a commission resets the default price, reopen the sheet. Do not reopen it every week. Serial switching collects introductory prices and sometimes termination fees.
For a business account, add the billed demand and the hour it occurred. Power factor correction might be an energy decision, a demand decision, or both. Writing them in one column hides which lever you actually pulled.
For a household, note whether the account is in your name. A landlord account cannot be switched by the tenant. A municipal utility or a cooperative account often cannot use a retail-choice shopping site. The header on the bill is the test, not the city in the mailing address.
Going further on Power factor correction
Power factor correction belongs on a commercial tariff. Separate energy in kilowatt-hours from demand in kilowatts before you talk about a supplier. A one-cent supply cut can be smaller than a single 15-minute peak.
Demand is often the highest average draw in a 15-minute interval. A ratchet can keep a share of a past peak on later bills. Read the tariff. The supplier does not waive a utility demand charge.
Interval data tells you whether the peak is a startup, a weather event, or equipment that should have been off. A monthly total hides that. Ask the utility for the interval file before you buy a control system on a hunch.
Full-requirements fixed supply, an index plus an adder, and utility default service are different products. Compare them only after you list which riders are included. A quote that excludes capacity or transmission is not cheaper until those lines are added back.
Bandwidth clauses rebill you when usage swings. A restaurant, a hospital, and a three-shift plant do not have the same shape. Give bidders the shape you actually run.
An illustration, not a bid: 650 kilowatt-hours at 7 cents is 46 dollars of energy. A demand charge is additional and is not in that product. Use the rate class on the bill.
What to verify before you act
Write down the utility name, the account name, the supply price or default price, and a typical month of use. Power factor correction does not change those four facts. If a contractor, a supplier, or a city page disagrees with the bill, the bill wins. Shop Energy Prices does not sell electricity and does not keep a live rate table.
Use one official source for the benchmark: the price to compare or default service on the bill, the state shopping site if your state publishes one, or the commission docket that sets the default. EIA’s national averages are context for scale. They are the wrong number to beat.
Keep the contract PDF. Circle the term, the fee to leave, the renewal rule, and any pass-through that is not fixed. A verbal match to a competitor is not the product. If you are inside a cancellation window, follow the written notice method the same day and keep a copy.
A worksheet for Power factor correction
Write the utility, the rate class, the current supply or default price, the end date, and a recent month of kilowatt-hours. Beside them write the alternative and every fee. Power factor correction is finished only when those two columns can be subtracted. If you cannot name the fee to leave, you do not yet have a decision.