Peak and off-peak energy, a demand charge, and a below-threshold power factor all combine into one monthly bill — with the PF penalty adding a small but real surcharge.
| Peak period | 8000 kWh at $0.42/kWh |
| Off-peak period | 15,000 kWh at $0.22/kWh |
| Peak demand | 120 kW at $35/kW |
| Fixed monthly charge | $100 |
| Measured power factor | 0.88 |
| PF penalty threshold / rate | 0.90 threshold, 0.5% demand-charge surcharge per 0.01 shortfall |
| Check | Requirement | Actual | Status |
|---|---|---|---|
| Total monthly bill | n/a (this is the estimate) | $11,002 | ✓ PASS |
| PF penalty as a fraction of total bill | n/a (informational) | $42 (about 0.4% of total) | ✓ PASS |
Key insight: The blended rate per kWh ($0.478) is meaningfully higher than either the peak ($0.42) or off-peak ($0.22) energy rate alone, because the demand charge, fixed charge and PF penalty all get folded into that single blended number — a common trap when comparing a facility's 'per kWh cost' across sites or months is treating the energy rate as the whole story when demand and penalty charges can be a large fraction of the actual bill.
Every input in this example is editable in the live calculator — free, no signup.
Open Demand Charge / TOU Tariff calculator →This reflects a common real-world utility tariff pattern — poor power factor increases the current (and therefore capacity) a utility has to provide relative to the real power actually delivered, so utilities often tie the penalty to the demand charge specifically, since that's the part of the bill tied to peak capacity provisioning rather than energy consumed. The exact formula and rate structure vary significantly by utility, which is why every rate in this calculator is a user-supplied input rather than a built-in constant.
In this example the PF penalty is only $42/month, a small fraction of the total bill — but for a facility with a much larger demand charge or a utility with a steeper PF penalty rate, the same shortfall could represent a meaningful ongoing cost, which is exactly the kind of comparison the Power Factor Correction calculator's own savings estimate is built to make.