A recurring issue I encounter when analyzing electricity bills issued by utility companies to their customers in Brazil—whether regulated or free-market—is the charging of penalties related to power factor.
These penalties are often labeled in a way that obscures their true nature—for instance, "excess reactive energy."
It is very difficult for anyone other than an electrical engineer to understand what this actually means.
These penalties generally stem from two main causes: (1) an inductive power factor falling below the minimum threshold, which typically occurs during both off-peak (daytime) and peak (nighttime) hours; and (2) a capacitive power factor falling below the minimum threshold.
The good news is that avoiding these penalties is extremely easy. Sometimes no cost is involved at all, while in other cases, the installation of capacitors is required.
So, do you know if your company or institution is being charged these penalties on its electricity bill?