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Reducing KW (Working Power) billing demand.
Low Power Factor or requires high reactive power (KVAR) and apparent power (KVA), which is the power that TNB supplies. Therefore, a facility's low power factor forces TNB to increase its generation and transmission capacity in order to handle this extra demand.

By increasing power factor, customers use less KVAR. This results in less KW, which equates to RM savings for TNB.

Eliminating power factor surcharge
Utility comprises all around the world charge customers an additional surcharge when their power factor is less than 0.95. In fact, some utilities are not obliged to deliver electricity to their customers at any time the customer's power factor falls below 0.85.

Thus, customer can avoid this additional surcharge by increasing power factor. In Malaysia, TNB is allowed through the Malaysian Grid Code and the Malaysian Electricity Distribution Code, to impose a surcharge to the customer if the power factor is <0.85 for customers receiving less than 132kV.

Increased system capacity and reduced system losses in your electrical system
Low power factor casuses power system losses in the customer's electricity system. By improving power factor, these losses can be reduced. With the current rise in the cost of energy, increased facility efficiency is important. Moreover, with lower system losses, customers are able to add additional load in their electrical system.

Increased voltage level in your electrical system, resulting in more efficient motors
As mentioned before, low power factor causes power system losses in customer's electrical system. As power losses increase, customers may experience a voltage drop. Excessive voltage drops can cause overheating and premature failure of motors and other inductive equipment.

Therefore, by raising the power factor, customers can minimize these viltage drops along feeder cables and avoid related problems. Motors will run more efficiently, with a slight increase in capacity and starting torque.