Working with a manufacturing client in Charleston who's facing $2,800/month in AEP power factor penalties. They're running about 0.82 PF with 800 kW average demand. I've calculated they need about 240 kVAR of capacitance to get to 0.95 PF. Capacitor bank quotes are coming in around $15,000 installed. Simple payback looks like 5-6 months but wanted to get others' thoughts on potential issues with AEP and capacitor installations.
AEP power factor correction - capacitor bank economics
Wanda, those payback numbers look solid. Main thing with AEP is making sure the capacitors are properly switched - they don't like leading power factor any more than lagging. We've had good luck with automatic controllers that stage the caps based on reactive demand. Also check if they have any interconnection requirements for capacitors over 200 kVAR.
Randy's right about the switching control. ConEd up here in New York requires notification for any capacitor installation over 100 kVAR. Wanda, check AEP's tariff for similar requirements. You don't want to install first and ask questions later with reactive power equipment.
Down in Louisville with LG&E, we see a lot of manufacturing plants over-correct and end up with leading PF penalties. The key is good load monitoring during the design phase. Wanda, what type of manufacturing loads are we talking about? Motor-heavy operations respond differently than electronic loads.
Walt, it's mostly motor loads - large air compressors, conveyor systems, and some welding equipment. I've reviewed AEP's interconnection requirements and anything over 100 kVAR needs their approval. Planning to submit the application next week with the electrical contractor's designs.
Sounds like a good plan Wanda. With those motor loads, you should see very consistent improvement once the caps are installed. Just make sure the contractor includes harmonic analysis - welding equipment can create issues if not properly filtered. Keep us posted on how the AEP approval process goes.