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Why your power factor penalty isn’t really about power factor.

The most common misdiagnosis we see — and what the demand-charge data actually tells you about plant behaviour.

Ing. Papa Kusi Nimoh-Brema, SPE-GHIE · PMP ·22 April 2026 ·6 min read

The first thing a plant manager does when an ECG bill shows a reactive energy penalty is call the electrical contractor and ask for more capacitors. The second thing — six months later — is call the same contractor back, because the penalty has not moved. Sometimes it has become worse.

This is the most common misdiagnosis in industrial electrical billing in Ghana, and it costs plants a real amount of money every month while they wait for someone to look at the problem properly.

What the bill is actually saying

A reactive energy penalty on an industrial tariff is not, strictly, a charge for low power factor. It is a charge for the reactive energy drawn from the network in a billing period over and above the allowance the tariff grants as a fraction of active energy consumed. The two quantities are related, but they are not the same number, and the difference is where the misdiagnosis lives.

Three distinct conditions all produce a reactive penalty on the bill, and each requires a different response:

THREE BILL-EQUIVALENT SIGNATURES — SAME PENALTY, DIFFERENT CAUSE A · STEADY-STATE LOW PF target PF flat ≈ 0.80 all day → capacitor banks B · INTERMITTENT PF ≈ 0.94, collapses on CIP / compressor starts C · HARMONIC fundamental fine; displacement at meter is not Vertical: power factor (low = bad) · Horizontal: 24-hour billing window
Fig. 1 — Load signaturesThe monthly bill collapses all three of these into one number. Only an interval survey separates them — and each demands a different remedy.

How to tell which one you have

It cannot be told from a monthly bill. The monthly bill is one number. It requires either a maximum-demand meter readout with a reactive-energy interval log, or — more usefully — a one-week power quality survey at the incomer.

At a juice and fruit processing operation in Nsawam, the monthly bill suggested a chronic power factor problem. The power quality logger told a different story: power factor averaged 0.94 across the week. The penalty was being generated by roughly [DURATION] per day of CIP and compressor start sequences during which power factor collapsed to 0.62. The plant had already installed [SIZE] of fixed capacitance the previous year, which did nothing for the penalty because the penalty was not steady-state. The remedy was a smaller, fast-switching automatic bank sized to the transient, plus a sequencing change on the CIP start that the operations team implemented in an afternoon.

The capital cost of the second remedy was roughly [PERCENTAGE] of the capital cost of the first. The penalty disappeared the month after commissioning.

The harmonic case is the dangerous one

Where plants get hurt is the third condition. A facility with significant drive-based load installs traditional capacitor banks on the recommendation of a supplier whose only diagnostic is the monthly bill. Within [TIMEFRAME] the capacitors are bulging, fuses are clearing on warm afternoons, and a contactor has welded shut. Capital has been spent twice and the penalty remains.

The honest answer in the harmonic case is detuned capacitor banks at minimum, and active harmonic filtering where total harmonic distortion demands it. The honest answer also requires somebody to measure the distortion before specifying anything — which is precisely the step the cheap version omits.

What to ask before purchasing anything

Show me a one-week interval log of power factor and reactive demand at the incomer, not a monthly average. Show me the harmonic distortion at the same point, voltage and current. Tell me which loads produce the reactive draw, and at what times of day. Then tell me what to buy.

Any supplier who can answer the first three questions before quoting is worth working with. Any supplier who skips them is selling capacitors, not solving a problem.

The principle. The penalty on the bill is real. The correct remedy is almost never the one the previous quotation assumed, because the previous quotation almost never measured first.

A note on figures. Specific quantities in square brackets are placeholders for values drawn from PKNB Consult engagement records. They are completed against project documentation prior to client circulation; client identities are withheld throughout as a matter of professional confidentiality.
Ing. Papa Kusi Nimoh-Brema · Principal Consultant, PKNB Consult · Accra, Ghana