A “power factor study” must be conducted with an effort to reduce ohmic losses in the plant cables, lines, and transformers caused by motors due to poor power factor performance and magnetizing currents. Appropriate actions must be implemented to maintain a proper pf at the point of interconnection (POI) with the utility and to reduce the import of reactive power into the plant. The pf correction equipment must be installed at the plant load centers where they are the most effective in reducing the flows of reactive power through the system.
The utility supplying the industrial load will insist on power factor of 0.95 or better. A poor power factor results in financial losses to the utility and the industrial plant in several ways:
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