Energy & Sustainability worked example

Power Factor Penalty at 72% share of demand penalized: a worked example

Suppose share of demand penalized falls to 72%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimate utility penalty cost from affected billing demand, penalty rate, billing applicability, and fixed correction costs.

The inputs for this scenario

  • Penalized billing demand: 640 kW (held at the documented default)
  • Utility penalty rate: 4.75 $ / kW (held at the documented default)
  • Share of demand penalized: 72 % (the input this scenario stresses; the baseline uses 100)
  • Fixed power-quality service charge: 250 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Variable power factor penalty = affected billing demand × power factor penalty rate × penalty applicability.
  • Total power factor penalty works out to 2,439 $ at these inputs, and this is the headline figure for the scenario.
  • Penalty per affected kW works out to 3.81 $ / kW at these inputs.
  • Variable power factor penalty works out to 2,189 $ at these inputs.
  • Fixed power-quality service cost works out to 250 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where share of demand penalized sits at 100% and the headline result is 3,290 $, this scenario comes in 25.87% below the baseline at 2,439 $.
  • It multiplies the penalized billing demand by the utility's per-kW penalty rate and the share of demand subject to the penalty, then adds any fixed power-quality service charge. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Total power factor penalty: 2,439 $ (headline result)
  • Penalty per affected kW: 3.81 $ / kW
  • Variable power factor penalty: 2,189 $
  • Fixed power-quality service cost: 250 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Power Factor Penalty calculator, set share of demand penalized to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.