kVAh Billing & Power Factor from Customer Perspective

Improve your Power Factor & Lower your Electricity Bill

As per MERC Order in Case no. 195 of 2017 dated September 12, 2018, The Commission intends to implement kVAh billing to all HT consumer and LT consumers having load above 20 kW from 1st April, 2020. In this article we will try to understand, what’s KVAh billing from customer perspective.

In kVAh based billing, fixed/ demand charges are levied on apparent power (kVA) and energy charges are levied on apparent energy (kVAh) instead of active energy (kWh). In future, energy charges will be levied based on this apparent energy (kVAh) consumption which eliminates requirement of charging active and reactive energy separately. But what is active, reactive & apparent energy? Let us first try to understand what these terms mean and what role does power factor play in your electricity consumption.

Suppose you order a mug of cappuccino. You pay for a “full” mug of cappuccino, but instead, what you get is a mug partially filled with froth. If the coffee in your mug is real power (i.e. kWh), full glass is total power (i.e. kVAh), and froth in the mug is reactive power (i.e. kVArh). Power factor is the proportion or percentage of mug filled with coffee, i.e. kWh/kVAh. In kVAh billing you pay for the full mug, the way you pay in a café, irrespective of coffee & froth. It, thus, becomes imperative that you maintain a high power factor (as less froth in mug of cappuccino as possible).

Let us look at some numbers to get a better idea of losses due to low power factor and how power factor affects kVAh billing:

Consumer 1 Consumer 2
900 kW of Power at 0.95 Power factor 900 kW of Power at 0.80 Power factor
Assuming 24 hours operation
kVAh1 = P1*t1 / P.F1 kVAh2 = P2*t2 / P.F2
kVAh1 = 800*24/0.95

= 22,737 kVAh

kVAh1 = 800*24/0.90

= 27,000 kVAh

Although both the consumers have similar loads (similar since only their active powers were same), their energy consumption differs by 4,263 kVAh or in other terms, Consumer 2 pays more for the froth than the actual coffee in the Mug.

Both Active (kWh) and Reactive (kVArh) energies are consumed simultaneously, just like the cappuccino. But, the Reactive Energy (kVArh) (i.e. Froth) occupies the capacity of electricity network and reduces the useful capacity of system for generation and distribution & hence its consumption also needs to be billed. kWh based billing has an inbuilt incentive /penalty mechanism and separate mechanism for the same is no more required like it was in kWh billing.

kVAh billing will ensure that the consumers who will utilize the power efficiently will be paying less energy charges as compared to others who are not using the power efficiently.

Improve your Power Factor and enjoy a mug of cappuccino with less froth!!





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