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Improve Profitability By Reducing Energy Costs

Texas Power Factor and Demand Improvement

Texas Utilities has recently begun a program to charge their top 100 customers with a power factor penalty.  During the rest of 2003 the remainder of the TXU customers with a demand in excess of 1 MW will begin seeing the penalty.  The utility will not charge the penalty if the user maintains a 0.95 power factor.

Capactitors can be installed to improve (increase) power factor, but as with any investment, you must determine if the benefit of installing capactitors is greater than the cost to install them.

Use this calculator to determine if installing capacitors is worth the investment.  This calculator asks 6 questions and then computes a rate-of-return and a payback period.  If the IRR is positive, this calculator will also compute how much positive cash flow this investment will generate over a 10 year estimated life.

To perform the calculations, we need three items from your electic bill, plus two items that will be obtained by looking at the nameplate of the incoming transformer feeding your facility. Those two additional items are used to determine whether the capactitor should be slightly increased or decreased to insure that we do not cause a resonance condition. Resonance is caused when a capacitor interacts with the transformer reactance, causing dangerous overvoltage conditions.

1.  What is your actual kW demand?

2.  What do you pay for each kW?
   $ (example: $10.60, $12.00, etc.)

3.  What is your power factor (PF) now?
    P.F. (example: 0.85, 0.87, etc.)

4.  What is the kVA rating of the incoming transformer? 

5.  What is the % impedance of that incoming transformer?
   %Z (4.5, 5.75, etc.)
(The transformer kVA and %Z are used to determine if installing this capactitor would cause a resonance condition.  Resonance should be avoided as it can cause dangerous overvoltage conditions.  We will use the kVA and %Z to insure that the capacitor selected does not cause a resonance condition.)

6.  What is the incoming voltage to this facility?  (Note: the higher the voltage, the lower the cost of capacitor.  If you have a choice of connecting them to the high voltage side of a transformer or the low voltage side, connecting the capacitors to the high voltage side will reduce the capacitor cost.)



Read about the complete selection of capacitors and harmonic filters available from Cutler-Hammer. 

Capacitor Technical Guide
More detailed, technical information on capacitors.

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