Customers with an inductive load and a power factor of less than what percentage are typically charged a penalty fee?

In electrical systems, the power factor indicates how effectively electrical power is being converted into useful work output. A power factor of less than 95% typically indicates that the customer is using a significant amount of reactive power relative to active power. This situation often occurs in systems with inductive loads, such as motors and transformers.

Utility companies impose a penalty fee on customers whose power factor falls below this threshold because low power factor can lead to increased losses in the electrical distribution system and require the utility to generate more power to satisfy the reactive demand. By setting the threshold at 95%, utilities encourage customers to improve their power factor, which can enhance the overall efficiency and reliability of the power grid.

While the other percentages are lower, they do not align with the typical standards set by utilities for penalty charges, which emphasize the importance of maintaining a high power factor for operational efficiency.