Phil G from Richmond, VA. Dominion Energy territory. Client is a large office building with a 500 kVA transformer. The building has a capacitor bank on the secondary side (480V) that keeps the power factor at the building distribution panel at 0.94. But Dominion is measuring power factor on the primary side (12.47 kV) at the utility meter, which is before the customer transformer. The transformer itself consumes reactive power — about 15-20 kVAR of magnetizing current. So the meter sees a lower power factor than what exists at the building distribution panel. The utility meter reads 0.86 PF and Dominion is assessing a penalty of $680/month. But the customer is doing everything right — their correction equipment brings the PF to 0.94 at the load. The transformer reactive demand is dragging down the measurement at the meter.
Utility measuring power factor at the wrong point — penalty should not apply
Phil, this is a legitimate technical dispute. The question is where the tariff specifies the power factor measurement point. Most tariffs say power factor is measured at the metering point, which is typically on the primary side for customers with utility-owned transformers and on the secondary side for customers who own their own transformer. Who owns the transformer in this case?
Randy, the transformer is owned by Dominion. It is a pad-mounted unit in the parking lot. The meter is on the primary side. The building owner did not choose this arrangement — Dominion installed the transformer and meter as part of the original service.
Phil, if Dominion owns the transformer, there is a strong argument that the transformer magnetizing current is Dominion equipment losses, not the customer load. The customer should not be penalized for reactive demand created by utility-owned equipment. Check the Dominion tariff for language about transformer losses and power factor measurement adjustments.
Walt, found it. Dominion tariff Schedule GS-3 has a footnote that says for customers served through company-owned transformers, the measured power factor shall be adjusted to exclude transformer magnetizing current. The adjustment formula is in Appendix C. This footnote has been in the tariff since 2006 and Dominion has never applied it to my client account. Five years of penalties that should have been adjusted.
Phil, that is a textbook case of the utility not applying their own tariff correctly. If the adjustment formula is right there in Appendix C, Dominion has no defense. They should rebill every month going back to whatever the lookback limit is.
Frank, Virginia lookback for utility billing errors is 3 years. At $680/month that is $24,480 in recoverable penalties. Filing the dispute today with a reference to Schedule GS-3 footnote 4 and Appendix C.
Update: Dominion reviewed the account and confirmed the transformer loss adjustment was never programmed into the billing system for this meter. They applied the Appendix C formula and the adjusted power factor is 0.93 — above the 0.90 threshold. Zero penalty should have been assessed. Dominion is processing a credit for 3 years of penalties.
Credit received: $24,480. The Dominion billing analyst told me this adjustment is supposed to be applied automatically when a company-owned transformer is in the metering path but it requires a manual flag in their system that was never set for this account. She estimated there could be hundreds of accounts in Virginia with the same missing flag. I asked if Dominion would proactively review other accounts. She said that was above her pay grade.
$24,480 recovered on a tariff provision the utility was not applying. Phil, you might want to check every client you have who is served through a Dominion-owned transformer. If the adjustment flag is missing on one account, it is probably missing on others. This could be a very productive audit angle across your entire client base.