How to check reactive energy charges on your electricity bill
An electricity bill may include much more than the cost of the kilowatt-hours consumed. For companies, manufacturing plants, warehouses, offices and service facilities, one of the additional cost items may be reactive energy charges.
The problem is that these charges are not always easy to find. Sometimes they appear in a detailed table of distribution charges, while in other cases they are included only in an attachment to the bill. Their names may also vary depending on the distribution system operator.
So how can you check whether your company is paying for reactive energy? We explain it step by step.
In everyday discussions, the term “reactive power charge” is commonly used. However, what is actually billed is reactive energy—the amount of energy associated with reactive power flow over a specified period.
Reactive power is expressed in var or kvar, while reactive energy is expressed in varh, kvarh or Mvarh. The unit kvarh is the one most commonly found on electricity bills and in metering data.
If you would first like to review the basic terminology, read: What is reactive power?
You should look for these charges in the section covering electricity distribution, not only in the summary of active energy consumption.
If your company receives a single combined bill, electricity supply and distribution costs may appear on the same document. Where separate contracts are in place, reactive energy charges will usually appear on the bill issued by the distribution system operator.
It is worth checking not only the first page of the bill but also the detailed breakdown, the metering point specification and all attachments.
The following terms may appear on the bill:
| Item on the bill | What could it mean? |
|---|---|
| Excess or over-contractual reactive energy consumption | The parameters specified in the contract or the operator’s tariff have been exceeded |
| Inductive reactive energy | Reactive energy most commonly associated with motors, transformers or refrigeration equipment |
| Capacitive reactive energy | Energy associated with, among other things, LED lighting, extensive electronic systems, long cable runs or overcompensation |
| kvarh or Mvarh | The measured amount of reactive energy |
| tgφ or tgφ₀ | A coefficient used when billing inductive reactive energy |
| Amount in PLN | The actual charge applied during the billing period |
The presence of reactive energy readings in the metering data does not always mean that a charge has been applied. Check whether the amount of energy is accompanied by a unit rate and a net value in PLN.
Inductive reactive energy occurs primarily in facilities operating electric motors, transformers, refrigeration equipment, air-conditioning systems, ventilation systems, compressors or production machinery.
The operator does not always charge for the entire amount of inductive reactive energy. The tgφ coefficient is particularly important. In simplified terms, it shows the relationship between reactive and active energy.
The limit is specified in the grid connection conditions, the contract or the relevant operator’s tariff. A value of tgφ₀ = 0.4 is often used, but it should not be treated as a universal rule. The documents applying to the specific metering point are decisive.
If the actual tgφ coefficient exceeds the contracted value, the operator may apply an excess inductive reactive energy charge.
A simple example
Assume that, during the same period and within the same billing zone, a company consumed:
- 20,000 kWh of active energy,
- 10,000 kvarh of inductive reactive energy.
The simplified coefficient is:
tgφ = 10,000 kvarh ÷ 20,000 kWh = 0.5
If the contracted value is 0.4, the result indicates that the limit has been exceeded. This does not mean, however, that the charge can be calculated by simply multiplying the difference by any selected rate. The billing method is defined in the operator’s tariff and may include additional coefficients.
The bill may also include a charge for capacitive reactive energy. This issue often occurs in facilities equipped with a large number of LED luminaires, electronic power supplies, UPS systems, long cable runs or an incorrectly sized compensation system.
Unlike inductive reactive energy, capacitive reactive energy may be billed without an equivalent allowance defined by tgφ₀. The detailed rules should always be checked in the contract and the relevant operator’s tariff.
Companies that already have a capacitor bank should pay particular attention. A system selected several years ago may no longer match the current load profile. Replacing lighting, changing machinery or reducing the operating time of certain equipment can lead to overcompensation. As a result, a solution originally intended to reduce costs may begin generating capacitive reactive energy.
First, check which metering point the bill relates to. This is particularly important when a company has several buildings, grid connections or electricity meters.
Next, locate the section covering distribution services and look for terms such as “reactive energy”, “excess consumption”, “inductive”, “capacitive”, “kvarh” and “tgφ”.
The next step is to check the amount shown in PLN. If the bill only indicates the amount of reactive energy but does not include a rate or charge, it may be metering information only.
A single bill does not always provide a complete picture. It is best to compare bills from the last 3–6 months. This helps determine whether the charge is constant, seasonal or appeared following a specific change in the facility, such as the installation of a new machine, a lighting upgrade or a change in the production schedule.
Finally, compare the information on the bill with the contract, grid connection conditions and the operator’s current tariff.
A bill can confirm that a problem exists and indicate its financial scale. However, it does not show exactly which equipment is responsible for the reactive energy or how the installation parameters change throughout the day.
For this reason, a capacitor bank or compensating reactor should not be selected based on a single bill alone.
Proper diagnostics should include an analysis of the bills and measurements of the electrical network parameters taken during a representative operating cycle. In a manufacturing facility, this means considering different shifts, shutdowns, machine start-ups and periods of reduced load.
Only this data can determine:
- whether inductive reactive energy, capacitive reactive energy or both are present,
- how large and variable the load is,
- at what times the limits are exceeded,
- whether the existing compensation system is operating correctly,
- which solution will be suitable for the specific installation.
Depending on the measurement results, the solution may involve capacitor banks, compensating reactors or automatic and dynamic compensation systems. You can read more about this in: Reactive power compensation – why is it worth considering?
For an initial analysis, it is worth preparing electricity bills from the last 3–6 months, including all attachments, the metering point number, the tariff group and information about recent changes to the electrical installation or machinery.
If a compensation system is already installed, its basic technical data and the date of its most recent inspection will also be required.
These documents make it possible to assess the scale of the problem and plan further diagnostics. However, the final selection of a solution should be based on measurements, not only on the amount shown on the bill.
To identify reactive energy charges on an electricity bill, review the section covering electricity distribution and look for items related to inductive reactive energy, capacitive reactive energy, excess consumption, the kvarh unit and the tgφ coefficient.
The bill is a useful starting point, but it does not replace an analysis of the electrical installation’s operating parameters. It shows the cost of the problem but does not always identify its cause.
If reactive energy charges regularly appear on your company’s bills, contact Trzecia Faza. We will analyse the documents, carry out the necessary measurements and help select a solution suited to the installation’s actual operating profile.
