As a facilities manager, you’re so busy that you’re doing well if you review your utility bills regularly. But when was the last time you closely examined your contract with the utility company? As we’ve seen with many of our customers, there’s often billing information contained in that agreement they aren’t aware of—and therefore aren’t taking advantage of for greater savings.

This article discusses how the “power factor” of a facility directly impacts billing; it also illustrates the need for power quality monitoring as a way of reducing costs. What’s the potential for savings?

We’ve seen facility managers reduce their utility bills by as much as 7–10% simply by improving their building’s power factor efficiency. Click To Tweet

What is power quality monitoring?

To answer this question, you first need to know a bit about electric power and the “power factor.”

Real Power, Reactive Power, & Apparent Power

Utility-supplied electric power entering your facility is comprised of power measured in amps and voltage. Alternating current (AC) travels in waves; when the voltage and current waves are out of sync, power distortion takes place. The displacement between current and amps gives rise to inefficiencies, which separates power into real and reactivepower.

Real power is the power that is consumed to run equipment and lighting, and is measured in kilowatts (kW).
Reactive power is the byproduct of the phase displacement between current and amp, and is measured as kilovolt-amperes reactive (kVAR).
Total or apparent power is the sum of both real and reactive power, and is measured as kilovolt-amperes (kVA).

A common way to illustrate the difference between these types of power is to compare them to a glass of beer.

The actual beer is real power, the power used by machinery and equipment to do useful work.
The foam represents reactive power, which doesn’t actually perform any useful work. (Note that just because it isn’t productive doesn’t mean it’s useless. There are advantages to reactive power, including the fact that it helps regulate voltage and contributes to the overall stability of the system. You can learn more about the advantages and disadvantages of reactive power here.)
The entire glass—both the beer and foam together—is the apparent power.

The Power Factor

The efficiency of a building’s electric system is measured by the power factor, which is the ratio of real power to apparent power:

To determine how effectively your building is using electricity, you divide the kilowatts used (real power) by the kilovolt-amperes (apparent power) used. If, for example, your building runs at 90 kW (useful, working power) and the total, apparent power is 115 kVA, you get .78, or 78%—meaning only 78% of incoming power does useful work.

The most efficient systems are those whose power factors are closest to 1.0, so the higher the power factor, the more efficiently your system is operating. To go back to the beer analogy—that means you want to minimize the foam, and maximize the beer.

Power factor is one important element contributing to power quality, an overarching term that refers to the characteristics of power supply that enable electrical equipment to work properly. There are other contributors to power quality as well (such as voltage sags and swells, harmonic currents, and more), but improving the power factor will have a positive impact on power quality overall.

As you might imagine, power quality monitoring is exactly what it sounds like—measuring the power quality of your building. Smart meters are capable of monitoring, measuring, and logging the components of an electric system, including real, apparent, and reactive power as well as active energy consumption. They can also provide an assessment of voltage fluctuations and frequency changes, which can be detrimental to motors and equipment.

Why is there a need for power quality monitoring?

Now that you understand what power quality monitoring is, you might be asking why: What’s the importance of power quality monitoring and its relationship to the cost of electricity?

Looking for ways to lower your facility’s utility bills? Ask us for recommendations—we can help!

As mentioned previously, a low power factor is not desirable. First, it means your building is using electrical power inefficiently. Your electrical system has a lower distribution capacity than it should, and it produces excessively high current flows. That could cause excess voltage drops and poor voltage regulation, which could lead to overheating and premature failure of equipment.

Second, a lower power factor also has a negative impact on your electricity bill. Most utility companies charge an additional fee to facilities that fail to meet a certain power factor. Why? Because large power loads with a poor power factor draw a larger current and place a heavier drain on the power source, requiring the utility to increase its generation and transmission capacity to handle the load. This power factor “penalty” is common among many utilities, especially as it applies to large industrial customers. In general, power factor readings above 0.95 are designated as efficient, while power factor levels below 0.85 are considered inefficient.

Most facility managers are unaware of this corrective billing policy at their utility—nor is it clear from looking at your utility bills if you’re being charged a low power factor penalty. The only way you could uncover this information is from first examining the details of your utility contract, which would outline the details of the policy and the power factor benchmark needed to avoid an additional charge. The next step: Perform power quality monitoring to learn more about your facility’s power quality and power factor, and know whether you need to take corrective action.

The Objective Of Power Quality Monitoring

Facilities that implement a power quality monitoring system are usually doing so as part of a broad objective to reduce operating costs. Once a facility manager has identified a problem with low power quality, he or she can begin to look for solutions to correct the issue, thus reducing or eliminating the corrective penalty applied by the utility.

For example, capacitor banks are often used to improve power factor efficiency. Designed to store energy, both capacitors and batteries can effectively counteract undesirable electrical characteristics such as power factor lag, relieving utilities from having to generate additional power. You can also use batteries as part of a demand response program. Charging them at night and using them during the day allows you to regulate current and power usage, and essentially better manage the current going into the building.

If you can increase your building’s power factor from .77 to .85, for example, that translates to an 8% decrease in your electricity bill. For large facilities, some of whom may be billed at over $1 million per year for electricity, savings of 7 to 10% represents a substantial sum—and a boon to your bottom line.

Do you need power monitoring?

Most facilities managers don’t realize how much low power quality is contributing to their high utility bills—until they get started monitoring, analyzing, and correcting the problem. At Iota Communications, we talk to facilities managers daily about various ways they can reduce and optimize their energy consumption, including power quality monitoring.

Our power quality monitoring subscription service can help you take control of your energy consumption. We use smart meters to continuously monitor and measure your real, apparent and reactive power remotely. Then, we help you understand the implications of those measurements to your facility by providing analytics around the data, and recommendations about how to mitigate power quality problems. As a result, you’ll be able to confidently take action to enhance your building’s energy efficiency and lower your operating costs as a result.

If you’d like to learn more about our power quality monitoring service, get in touch.