First of all, let us understand the change in billing from kWh to kVAh and the effect on bill due to this change taking place. Following table shown below gives brief idea as to how the calculation of kWh and kVAh is being done (reference: MERC Tariff Order).
kWh billing: kVAh = SQRT((kWh^2)+((RkVAh)^2))
kVAh billing: kVAh = SQRT((kWh^2)+((RkVAh.Lead+ RkVAh.Lag)^2))
As per above with same units, under kWh billing customer was eligible for credit of 1.5%, while under kVAh billing the billing unit are increased from 10,000 to 11,180 or an increase of 11.80%? Whopping?
kVAh billing in India
Historically electricity bills used to have penalty of credit for maintaining PF applicable for consumers with specific load / category of uses. In some of the states instead of credit / penalty for maintaining PF at certain level, the billing has changed on kVAh instead of kWh.
MSEDCL HT consumers’ PF management
How well Maharashtra consumers are improved since kVAh billing started in April 2020? Well here we are going to analyze status of HT consumers in MSEDCL managed their power factor during Jan 2021 to Nov 2021. Since the data are for Maharashtra State (excluding Mumbai’s certain areas), the data become valuable for the industry for the purpose of learning. So far these data are used or analyzed to help the industry to make its members know and understand the potential of this specific aspect and its ignored areas of active management.
Power Factor maintained at various load level by MSEDCL HT customer from Jan 2021 to Nov 2021
Here in this study we excluded HT consumers whose contract demand is less than 200 kVA, which are 34% of total MSEDCL HT consumers:
a. Above 10000 kVA there are few customers, however on load there are still problems to manage PF at 100000 kVA, which is surprising.
b. Majority of HT customers are having load less than 2000kVA, therefore detailed analysis is done separately.
c. R2 value as per linear equation is 0.513, which is quite poor, which shows wider fluctuation and disparity in PF level managed at various CD level. This is again as we are covered is very wider from 200 kVA to 350000 kVA.
d. The dotted line for trend marking is almost fitting at all CD level with little difference. This shows CD level has effect on PF managed change in line with level change.
e. Consumers with CD of 450-900kVA has around 0.90 level of PF, who are facing cost increased by around 10%, which is very big. These consumers up to 500kVA are almost 2/3 of consumers covered in study, which is very big no and surprising.
f. Increase of cost by around 10% by majority of these consumers are the one generally either missing capable technical team, non-technical background of owners, PSU/Government/ Semi government / AG / Railway consumers.
Close look at MSEDCL HT consumers having contract demand between 200 kVA – 2000 kVA
Some interesting underlying facts in respect of HT consumers with load from 200 kVA to 2000 kVA are given below:
g. 95% of total HT consumer are within this range from 200 kVA to 2000 kVA, while only 5% consumers with load in excess of 2000 kVA.
h. This category of majority of customer are MSME. Since repeated lockdown in COVID, there is huge stress on MSME units. Therefore, PF management for MSME become much more important and critical.
i. Linear trend line marked in red with equation is also marked for better understanding of the data in chart.
The chart shows while on lower level the average billed PF is very low @ 0.868 and moves up gradually and at 800-900 kVA touches to 0.900+.
j. R2 value as per linear equation is 0.799, much better than first table which was 0.513, which indicates good co-relation between load and PF at various level. This also implies that as the load goes up average PF will improve. As the load increases, the bill also increases and high value customer are expected to have technical staff and more awareness of owners to keep PF at good level to control the power cost.
k. Even at higher level there are customers who are not bothered for PF management. These are mostly expected under Government Department, Railway, AG Pumping, PWW etc.
Analysis of high load consumer having contract demand between 10000kVA-60000kVA to show quality of PF management
These are ultra-high-power cost consumers having annual cost of Rs 100-200 Crores or more so it is expected that they are supposed to be well managed. However, let us see if this is really the case…
Here we need to look at the PF, standard deviation, variation between min, max and average PF.
l. PF with Standard Deviation of average PF, ratio of Max/Avg PF, Max/Min PF is shown in chart.
m. The chart shows that consumers with 40000-55000kVA manage far better consistently compared to consumer with load between 10000-40000kVA.
n. Customer with load 40,000-55000 kVA are far better compared to 10,000-35000kVA, who are having less variation in their average PF managed in 11 months and shows consistency if average PF, which is apparent from high StdDev reported.
o. The Max/Avg & Max/Min ratio’s shows fluctuation in average PF achieved, which is at comparatively at good level. Higher the ratio, higher the fluctuation and higher the average cost of missing PF to pure unity.
p. This shows another important and critical aspect of PF management that even at such extreme high-level PF is not managed consistently.
Analysis of HT consumers having average PF 0.900 or more whose contract demand is between 200 kVA to 2000 kVA
In this section we will study consumer who are 68% of table at point 2 who are able to maintain PF 0.900 or more and their behavior in respect of maintaining and managing PF and its consistency.
q. In this we noted that 68% of consumers are the one whose average PF of 11 months is 0.900 or more.
r. Consumers managing average PF at 0.985 or more is much less as shown in the table above. From 0.90-0.98 there are 71% consumers but above 0.98 are only 29% consumers. Between these two set of consumers 0.98+PF are having less variation in average PF as well.
s. In addition to average PF, minimum and maximum PF was also taken. Standard Deviation of average PF was added in the chart.
t. Standard Deviation of average PF shows interesting fact that above 0.985 PF, customers are maintaining and managing the PF much more systematically and therefore the Standard Deviation of average PF of these customers dropped.
Big question – Why PF is not consistently maintained?
It is really disheartening to note that consumers are not able to maintain and manage the PF. Brief ideas on the issue has been presented based on the detailed discussion we have noted in previous points:
u. Several consumers purchased new APFC since new tariff for HT consumers started in April 2020, which we have noticed during our several customer visits.
v. However, unfortunately still they are having 1%-3% extra billing units, despite of incurring lakhs within 2-3 years of previous installation in Sept 2018 tariff change, which demands active PF management.
w. Active PF non-management issue is not only present in Maharashtra, but also in the entire country. Large customer merely looks at say 0.993 or 0.997, without going into nitty-gritties, leaving scope open unattended.
x. Efforts were put to understand as to why this issue is there in respect of continued managed PF. Visited numerous installations, checked ways and means adopted in the process to maintain and manage the PF.
y. The root cause noted is mainly on account of selling approach adopted by most of APFC vendors, who are bothered to demonstrate PF within first 1 to 2 (or max 3) months, however thereafter they disappear or generally would give excuse or may take some action including replacement of few capacitors, but the problem continues. The problem compounds as majority of consumers (MSME) either don’t have well experienced technical team or owners are not having technical background to understand the issue.
z. There are several issues that require careful analysis and evaluation while APFC configurations are being decided, however we have seen:
i. vendor quote based on one latest bill of consumer
ii. vendor quotation without detailed technical details instead giving one line like “APFC with 210 kVAr”etc.
iii. vendor quotation without proper design of all component, which require careful selection by technical expert having knowledge and expertise and understand the impact, but this is ignored as most of the customer / owner and plant staff do not have relevant diagnostic capability to ask for the same and inferior designs are accepted.
iv. negotiation by customer with vendor based on only cost without checking technical configurations
v. vendor / customer relying to improve PF only on APFC system, ignoring systematic management, which requires regular efforts.
Most important aspect post buying APFC, which fails to deliver output desired systematic, where systematic working can help maintain and manage the PF, but very few consumers (<.5%) work on the same. They miss to understand that capacitor de-ration is unavoidable and there are other issues as well. This is based on review, checking and analysis of several consumers. This is applicable for not only small consumers, but for large consumers with load of 10000 or 100000 kVA even. If systematic work is undertaken, PF can be controlled to good extent, but…
Summary outcome of Analysis: Let’s summarize finding of this analytical review for quick understanding:
i. With lower load / demand / consumption, the PF is not managed well due to lack of quality team / capabilities.
ii. As load / demand / consumption start increasing, the power bill goes up and owners start taking interest, who are being assisted by technical team to improve, maintain and manage.
iii. There is wide variation in PF being maintained by customers. Even some of customers with high load fail to manage PF.
iv. In this analysis we used Standard Deviation to show change in the underlying data. To put it simply, when Standard Deviation is used and is lower, means less variation compared to average values.
v. Those having lower load definitely have good opportunity to reduce cost due to increased billing units. Simply as large units are able to manage, so why others can’t?
Behavior of customer less than 0.90 average PF
i. 25% of consumers from 200kVA+ are having average PF less than 0.90.
ii. Average of the average PF of these is merely 0.766, which means scope to reduce cost by 25%+?
iii. Huge saving and this is expected to give recovery of cost within 6-12 months alone. Such returns not expected in any business.
It is not impossible to maintain and manage the PF consistently, however while buying the system, one must understand it is not equipment alone but system and practices, which can only ensure smooth operation and consistent management of PF. So, one must remain vigilant from product seller. We have used structured control reports that means to identify various issues for improving the same on consistent basis, which provides huge scope for large consumers.
CA Mahaveer Kumar Jain is the founder Director of E-Efficiency Management Consultancy Private Limited (EEMC) and has over 20 years of professional experience in commercial function. EEMC is a specialized advisory consultancy company engaged in servicing clients to help in cost reduction, efficiency improvement and resource optimization. The sole focus of EEMC is to help its clients to save cost.
