Power Factor Correction for Alberta Businesses: What It Costs You and When It Pays

If your Alberta business is demand-metered, poor power factor can quietly inflate the delivery half of your bill every single month. It is one of the few charges you can reduce with equipment rather than negotiation — and one of the most commonly ignored, because it is buried in a line most people never read.

Last updated September 12, 2026.

What power factor actually is

Motors, compressors, transformers, welders and older fluorescent ballasts do not draw power in a clean, in-phase way. Part of the current they pull does real work — that is your kilowatts. Part of it goes into building and collapsing magnetic fields and does no work at all. Power factor is the ratio between the two: 1.0 means everything you pull does work, 0.75 means a quarter of the current is going nowhere useful.

The wires company still has to deliver all of that current, so the tariff makes you pay for it. Depending on your distribution tariff and rate class, that shows up either as a kVA-based demand charge or as an explicit low power factor penalty. Either way it lands in the delivery section of the bill, not the energy section — which is why a retailer quoting you a better cent per kilowatt-hour will never mention it.

Which businesses actually have this problem

Power factor is a motor problem, so the sites that suffer are the sites full of motors running below their rated load:

Machine and fabrication shops — compressors, lathes, mills, welders
Sawmills, processing plants and packaging lines
Refrigerated warehouses and cold storage
Irrigation and water pumping
Older buildings with large HVAC motors and no variable speed drives
Arenas, pools and recreation facilities

An office, a retail store or a restaurant almost never has a power factor problem worth correcting. If someone is selling you correction equipment for a storefront, ask to see the kVA line on your own bill first.

How to tell from your own bill

Look for one of three things in the delivery section: a charge expressed in kVA rather than kW, a line literally called power factor or reactive demand, or a billed demand figure that is noticeably higher than the metered kW demand. Any of those means power factor is priced into what you pay. If your bill only ever shows kW and kWh, it probably is not.

We pull twelve months of billing and, where it is available, interval data. That tells us not just whether power factor is costing you money, but how much and in which months — which is the difference between a real business case and a sales pitch.

What correction involves

The usual fix is capacitor banks sized to the reactive load, either fixed or automatically switched, installed at the main switchgear or at individual large motors. On sites with variable speed drives or a lot of electronic load, harmonics have to be assessed first, because plain capacitors on a harmonic-rich system can make things worse rather than better. That assessment is part of the work, not an afterthought.

Correction equipment, engineering and installation are arranged through our network as part of the package when a review points at them. We do not treat it as a separate engagement you have to go shopping for.

Reading the signals on your bill

What you see	What it means
Demand billed in kVA	Your tariff prices apparent power, so poor power factor is directly inflating the demand charge every month.
A power factor or reactive demand line	An explicit penalty. Usually the clearest business case there is.
Billed demand higher than metered kW	Power factor is being applied as an adjustment behind the scenes.
Only kW and kWh, no kVA anywhere	Power factor is probably not costing you anything. Spend the effort elsewhere.

This is one of the things we look at during an Energy Cost Audit, not a separate product you have to buy. If the numbers do not work for your site, we say so — that is a perfectly normal outcome and it costs you nothing to find out.

Book a free Energy Cost Audit

Send us one recent electricity bill and one natural gas bill. We review both halves — the
energy you buy and the delivery charges you are billed to receive it — and come back with a
written summary of what we found and what, if anything, is worth changing. No cost, no obligation,
and no requirement to switch anything.

Upload your bills — free Energy Cost Audit

Prefer email? Send your bills to
info@getenergy.ca, or call
(780) 665-4771, Monday to Friday 9 AM–5 PM.

Common questions

Does power factor correction reduce my energy consumption?

No, and be wary of anyone who says it does. Correction reduces the reactive current your site draws, which lowers kVA-based demand charges or power factor penalties on the delivery side of the bill. Your kilowatt-hours stay about the same.

How do I know if power factor is costing my Alberta business money?

Look at the delivery section of your bill for a demand charge expressed in kVA, a line called power factor or reactive demand, or a billed demand that is higher than the metered kW demand. Any of those means power factor is priced into your bill. If you only see kW and kWh, it likely is not.

What kind of businesses benefit from power factor correction?

Sites with a lot of motor load running below rated capacity: machine and fabrication shops, processing plants, cold storage, irrigation and pumping, arenas, and older buildings with large HVAC motors and no variable speed drives. Offices, shops and restaurants rarely benefit.

Do I have to be a Get Energy customer?

No. The review is free and stands on its own, and a power factor finding is yours to act on however you like, including with your current retailer in place.

Other things the review can act on

More for Alberta businesses

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Get Energy is an Alberta competitive retailer and energy broker serving
residential, small business, farm and commercial consumers. Get Energy is a tradename of Utility
Network & Partners Inc.