In view of MERC Tariff order 195 of 2017 dt. 12.09.2018, Penalty for leading Power Factor is introduced,whereas incentive is applicable in case of lag PF only.
Penalty for leading power factor also introduced. This penalty will be applicable from prospective effect. As a first step towards the kVAh billing system, which is devoid of any separate incentive / penalty for power factor, the Commission has decided to reduce the existing PF Incentive/ Penalty by 50%.
Accordingly, maximum PF Incentive, which is 7% at the Unity Power Factor, has been reduced to 3.5%. Similarly, Penalty for the lower power factor has been penalized.
Whenever the avg P.F. is more than 0.95 Lag and upto 1, an incentive shall be given at the rate of percentage in Tariff order at the amount of monthly electricity bill, excluding taxes and duties. And whenever average P.F. is less than 0.9 (Lead or Lag), Penal Charges shall be levied at the rate of percentage of amount of monthly electricity bill, excluding taxes and duties.
i. If PF Level is less than 0.90 then penalty shall be as per percentage given in MERC order.
ii. If PF Level is greater than 0.95 and RKHAV Lag consumption >= RKVAH Lead consumption then incentive shall be as per percentage given in MERC order.
iii. If PF Level is greater than 0.95 and RKHAV Lag consumption < RKVAH Lead consumption then incentive shall not be applicable.
iv. If the RKVAH Lead reading is not available then old procedure of PF computation
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