POWER FACTOR TARIFF:
• The tariff in which power factor of the consumer’s load is taken into
consideration is known as power factor tariff.
• In AC system, power factor plays an important role.
• A low power factor increases the rating of station equipment and line losses.
• Therefore, a consumer having low power factor must be penalised.
• The following are the important types of power factor tariff:
(i) kVA Maximum Demand Tariff:
• It is a modified form of two-part tariff.
• In this case, the fixed charges are made on the basis of maximum demand in
kVA and not in kW.
• As kVA is inversely proportional to power factor, therefore, a consumer having
low power factor has to contribute more towards the fixed charges.
• This type of tariff has the advantage that it encourages the consumers to
operate their appliances and machinery at improved power factor.
(ii) Sliding scale tariff:
• This is also known as average power factor tariff.
• In this case, an average power factor, say 0·8 lagging, is taken as the reference.
• If the power factor of the consumer falls below the reference, suitable
additional charges are made.
• And if the power factor is above the reference, a discount is allowed to the
(iii) kW and kVAR tariff:
• In this type, both active power and reactive power (kW and kVAR) supplied
are charged separately.
• A consumer having low power factor will draw more reactive power and hence
shall have to pay more charges.
 THREE-PART TARIFF:
• By adding fixed charge or consumer’s charge (i.e., a) to the two-part tariff, it
becomes three-part tariff.
• When the total charges are split into three parts viz.,
(a) Fixed charges;
(b) Semi-fixed charges; and
(c) Running charges
Then it is known as a three-part tariff.