New to Arkansas and working my first SWEPCO account. Large manufacturing plant in Jonesboro getting PF penalties. What's the threshold for penalty calculation on their large power schedule?
SWEPCO power factor penalty threshold
SWEPCO uses 90% PF threshold on Schedule LP. Penalty is $3.20 per kVAR for reactive demand in excess of that needed for 90% power factor. Pretty standard stuff.
Thanks Bob. Client is running 84-87% consistently. About $2,800/month in penalties. They're interested in correction equipment but want to understand the full financial picture first.
Make sure you factor in Arkansas sales tax exemption for manufacturing equipment. Capacitor systems qualify if they're used in the manufacturing process. Can reduce equipment cost by 6.5%.
Excellent point Wayne. Didn't think about the tax exemption. That helps the ROI calculation significantly.
Also check if they qualify for any efficiency rebates through SWEPCO or Arkansas Economic Development. Some power factor correction projects qualify for incentives.
Found a small rebate program - $500 per 100 kVAR of correction capacity installed. Not huge but every bit helps. Client is moving forward with $28K system.
Great work Kenneth. Don't forget to verify the capacitor system is properly maintained after installation. I've seen too many systems fail within a few years due to neglect, bringing the penalties right back.