Power Factor Information Session

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Setting Expectations
What Is Power Factor?
Why is Maintaining a Good Power Factor Important?
What Are the Reasons for Implementing Power
Factor Billing?
How Will Oncor Use Power Factor To Adjust Demand?
How Will Oncor Implement Power Factor Adjusted
Billing?
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Definition of Power Factor
Power Factor (PF) is a measure of how efficiently
energy is used1.
1 Oncor - Energy Industry Web-site
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What Is Power Factor?

• Power Factor Illustration
• Examples of Electric Equipment and the associated
  Power Factor
• Importance of Being In Phase
• Power Factor Recap

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Power Factor Illustration
Consider a horse (transformer supplying power)
chained to a railcar (premise load) pulling it
down a railroad track. This is the most efficient
use of the horse, pulling the railcar straight
down the tracks. We will label this premise
Premise A.
Efficient Use of Energy Ideal Power Factor of 1
Premise A -
Illustration Courtesy of Department of Energy
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Power Factor Illustration
The type of power that the horse uses to
efficiently pull the railcar down the track is
called Working Power. Working Power is the real
power necessary to do the work efficiently and is
measured in kW.
Premise A
Efficient use of energy
Illustration Courtesy of Department of Energy
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Power Factor Illustration
At another premise we have a similar situation
however, the horse will have to pull the railcar
at an angle because of cinder rocks on the track.
This is an inefficient use of the horse. We will
call this Premise B.
Premise B
Inefficient Use of Energy Power Factor reduced
from 1 to .5
Illustration Courtesy of Department of Energy
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Power Factor Illustration
The inefficiency creates two additional types of
power Apparent Power and Reactive
Power. Apparent Power is measured in kVA and
Reactive Power is measured in kVAr.
Illustration Courtesy of Department of Energy
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Importance of Being In Phase
In any circuit, current and voltage are always in
a three legged sack race. Current and voltage
are most efficient when they work together and
they are in phase. When inefficient equipment
with a poor Power Factor is used, current lags
behind voltage.
Current voltage in phase
Capacitive Leading
Inductive Lagging
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Examples of Electric Equipment and Their Power
Factor
Different types of electric equipment have
different Power Factors and consequently
different efficiencies and current requirements
Name of Equipment
Power Factor Percent
Lightly loaded induction motor
.20
Loaded induction motor
.80
Neon-lighting equipment
.30 - .70
Incandescent lamps
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All types of resistance heating devices (e.g.
toaster, space heater)
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Why is a Good Power Factor so important?
A well designed distribution system is critical
because it allows Oncor to deliver energy using
minimal facilities.

• A key goal in distribution system design is the
  lowest cost consistent with an efficient and
  reliable system.
• The more efficient the system design is, the
  lower the cost to build the system which results
  in lower rates.
• The more uniform the asset requirements are for
  premises within a given rate class, the less
  likely there will be subsidization between
  premises in the rate class.
• 2 Key Points
• 1) A premise with a poor Power Factor requires
  more current and thus larger more costly
  distribution facilities.
• 2) A distribution system with a poor Power Factor
  requires excess facilities and thus costs more to
  build and maintain.

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Power Factor Basics Recap
Now that weve defined Power Factor, lets review
the key concepts
The higher the Power Factor, the more efficiently
energy is being used.
The more efficiently energy is being used, the
more efficient distribution system design can be.
The more efficient the distribution system is,
the lower the overall costs of building and
maintaining the system.
The more consistent the system design is for
similar premises, the more fairly costs will be
allocated and less cross-premise subsidization
will occur.
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What Are the reasons for Implementing Power
Factor Adjusted Billing?

• Timing and Resources
• Benefits to the Market Oncor
• Benefits to the End-Use Customer

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Why Oncor is Implementing Power Factor Billing

• A majority of electric utilities already bill for
  poor power factor.
• The option of adjusting billings for poor Power
  Factor has been in our tariffs for years but the
  costly modifications to metering and CIS system
  to allow implementation were not made until
  recently.
• The competitive market has a high expectation for
  proper allocation of costs and accurate
  settlement of the wholesale market.
• Maintaining an appropriate reactive power level
  is critical to ERCOT system reliability.
• The large number of system modifications
  necessary to get ready for the competitive market
  did not allow resources for the extensive system
  modifications for power factor billing until
  recently.

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Benefits to the Market Oncor
There are several benefits that the Market and
Oncor will realize from implementation of Power
Factor Adjusted Billing

• ERCOT requires that Oncor and other TDSPs
  maintain a .97 system Power Factor.
• Oncor will be able to reduce capital
  expenditures.
• System constraints will be reduced and
  transmission reliability enhanced.
• Over the long term, higher Power Factors will
  allow better system planning.
• Increasing efficiency of Oncor facilities and
  lowering line losses will increase Oncors
  contribution in lowering greenhouse gas emissions
  in Texas.

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Benefits to the End-Use Customer
Non-residential end-use customers will benefit
over the long term in a variety of ways with the
implementation of Power Factor Billing.

• All end-use customers will receive a more fair
  distribution of costs from a properly sized
  distribution system.
• It is not a question of if power factor is
  considered it is a question of who pays.
  Non-residential end-use customers that maintain a
  Power Factor of .95 or better will no longer
  subsidize low Power Factor customers.
• Non-residential end-use customers improve the
  overall efficiency of their facilities with a
  higher Power Factor due to increased capacity in
  branch circuits.
• Non-residential end-use customers could
  experience fewer premature equipment failures

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How Will Oncor Use Power Factor To Adjust Billing
Demand?

• High Level Power Factor Billing Process
• Power Factor Calculations
• Practice Examples for Determining Power Factor
• Variability of Power Factor Over Time
• Power Factor Readings
• Texas SET 867/810 Information

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Power Factor Calculations
Now that youve seen the overview of Power
Factor , it is important to understand how Oncor
will use Power Factor to adjust premise billing
demand.
Power Factor
PF Adjustment Factor
PF Adjustment Factor X Billing Demand
PF Adjusted Demand
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Power Factor Sample Calculations
Now lets look at an example of how to determine
Power Factor.
Example 1
Power Factor
A premise has a metered demand of 100 kW and the
premise KVA is 120. What is the Power Factor?
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Power Factor Sample Calculations
Next we will determine the Power Factor
adjustment factor.
Example
PF Adjustment Factor
The Power Factor tariff (.95) is divided by the
premises actual Power Factor (.83). What is the
Power Factor adjustment factor?
.95
1.145 PF Adjustment Factor
.83
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Power Factor Sample Calculations
Finally, lets determine the Power Factor
adjustment to demand that Oncor will send to the
CR.
Example
PF Adjusted Demand
PF Adjustment Factor x Actual/Billed kW
The Power Factor adjustment factor (1.145) is
multiplied by the premises actual kilowatts
(100). What is the final Power Factor adjusted
demand?
115 (PF Adjusted Demand)
1.145 X 100kW
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Variability of Power Factor Over Time
An non-residential end-use customers Power
Factor does not remain constant. For billing
purposes, PF is measured at the highest 15 minute
peak demand during the monthly meter reading
cycle.
PF is measured at the time of monthly peak demand
1.00
.97
.95
.94
.93
.92
. 90
.80
.60
.40
.20
0
Jan
Feb
Mar
Apr
May
Jun
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Sample Power Factor Readings
As discussed before, Power Factor can vary from
cycle to cycle. The meter readings below depict
Power Factor from poor to optimal.
Poor
Acceptable
Optimal
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Texas SET Transaction Information
Tx SET 867
For IDR, kVARH consumption data along with power
factor provided in the format x.xxx For non-IDR,
the power factor will be provided in the format
x.xxx
Tx SET 810
Each charge and its associated kW will represent
the total 4CP, NCP, and Bill kW after the power
factor adjustment has been applied
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How Will Power Factor Billing Be Implemented?

• Implementation Strategy
• Current Status
• When Power Factor Adjusted Billing Will Be
  Implemented

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Implementation Approach
The approach for implementing Power Factor
Billing must be non-discriminatory. This means
that Power Factor Billing will be turned on for
premises based on where their demand falls within
the three independent tracks (transmission,
primary, and secondary).

• Strict descending demand order within each track
  based on highest actual demand recorded during
  previous 12 months.
• No premise may have Power Factor billing
  implemented unless all premises with the same or
  greater high demand have been implemented.

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Current Status
Here is where we are at this point in the
implementation plan.

• Installation/programming of meters is occurring
  daily.
• 43 premises are included in the first round of
  premises to have Power Factor billing turned on.
• The benefits realized from implementing Power
  Factor billing in 2004 are limited by the number
  of meters that can be installed/programmed during
  the year.
• Power Factor communication and roll-out effort is
  underway to educate all impacted groups regarding
  Power Factor basics.
• End-use customers with premises on Oncor demand
  billed rates should be encouraged to get an
  evaluation of their facilities ahead of
  implementation.

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How Power Factor Will Be Implemented
The timeframe for the implementation is as
follows
Nov 03
Dec 03
Jan 03
Feb 04
Oct 03
Earliest date for first group implementation
(IDR)
1st Qtr, 2004
Additional IDR Premises and eventually non-IDR
according to descending demand order
Six weeks prior to Implementation
Communication of premises to CRs
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Power Factor Resources
Oncor has additional information about Power
Factor located on the Oncor website
http//www.oncorgroup.com/electricity/metering/pow
er_factor/
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Questions?