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Electric company in some countries apply financial penalty for electricity consumers which have power factor lower than 0.9 If electric companies charged customers for apparent power, people would be encouraged to buy electric devices with better power factor because they will pay for Volt X Amp. Also, the company wouldn't need need to check the power factor of the consumer every day.

I think this could be more economic for the electric company.

So I'm wondering why the electric company doesn't sell the electricity according to Apparent power, so people are responsible for power factor correction, not the company.

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  • \$\begingroup\$ Yeah, that's why governments of certain kind got torn down by their people more frequently than others. \$\endgroup\$ Commented Mar 28, 2017 at 17:40
  • \$\begingroup\$ I'm not sure what you think would change. At least in the USA, while residential users are only charged for real power, most large industrial users are already penalized for having a low power factor. \$\endgroup\$
    – Dave Tweed
    Commented Mar 28, 2017 at 20:47

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It takes centuries to many many decades to change standards in the power industry. It was a Westinghouse electrician, who designed the original meters in 1888 and it measured only current, then voltage was added and the meters were refined and reduced in size. I believe it was seen that VAR meters were inaccurate with non-linear loads, varying voltage, power factors and the penalty for VAR readings were too high. So true watt-meters were demanded.

Meter design is still evolving but they must be amortized over a 50 yr expected lifespan. Changing consumer rates and method of measurement is a highly political topic as energy costs and votes and often related.

Economy of scale might indicate that the consumer costs might not be lower if responsible for power factor correction, but new regulations on high PFC power supplies is one way of improving PF with the rise of SMPS.

Now with utilization losses from poor PF being more significant opportunities for improvement, utilities must offer incentives, either by rate structure , penalties to motivate customer change and consider the active VA correction technology to improve efficiency against costs of new generation.

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Consumers actually pay V x A x PF. The voltage is important because of the voltage drop on long supply lines. The current speaks for itself. The PF depends on the type of load. If the PF (1 or less) is to low then the current in the network has to be more to supply the same power (W) or Energy ( J) over time. This at the expense of the electric company.

Nowadays many induction meters are replaced by digital versions. There we already discover problems resulting from increased use of electronic controls. Such controls do not have a nice sinewave as a load current causing misreading ( to high).

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