Electric Utility companies nationwide come in a variety of business types from power generation companies to the much smaller cooperatives you will find in most rural communities. To one extent or another they all deal with the electricity your home or business depends on but it is in what they actually do with electrical power that determines the type of business they are and how that may very well directly impact your monthly bill. If you were to do 2 cost comparisons between an Electrical Generation Plant based electric utility and an LDC you would find glaring cost differences between the two and it is these costs that this article will focus on primarily. However, you must understand one thing regardless what type of electric utility you have to buy your electrical power from and that is they are in business to make a profit and the better their profit the happier their stock holders are.
The majority of electrical utility companies nationwide are what is known as an LDC or Local Distribution Company as they do not actually generate the power you are buying but rather they sell electricity in bulk. Actual generation companies distribute their power all over the country so that the LDC’s can buy and sell it to entire communities so they too can make a profit and depending on whether it is on or off peak directly affects its cost per kilowatt hour. Even the new rules that are coming into play by many state utility commissions write their rules to the benefit of these companies where grid-tied solar or wind energy systems are concerned by charging a per kilowatt fee to the renewable energy system owner. That’s right! They actually charge YOU to feed YOUR excess power onto their grid while at the same time paying you less than the retail value for that same power which your system generated at your expense.
There are a number of articles I have written regarding energy efficiencies for your homes and businesses which all refer to the importance of maintaining the highest possible power factor in either to greatly reduce wasted electrical energy and thus your monthly costs. While ensuring this is the case for your home or business you need to know that improving your power factor is going to also reduce the volume of energy these companies can viably sell. So is it in any electrical utility companies best interests to advocate or make their customers aware of this on a large scale? Of course not! Lower volume energy sales equals to lower revenues and therefore lower profits and what really drives this point home with many people is when they find out that a great many of these electric utility companies actually charge you a penalty fee for having poor power factor.
So when I hear of people who have refused to take advantage of the very affordable devices such as the power factor conditioner because their electric utility company or one of it’s employees spoke poorly of them I have to laugh. It is very obvious why they speak poorly of them because it directly affects their bottom line! Remember? They are after all a business that is in business to make a profit and if you have poor power factor you will also use more electrical power meaning they can charge you more for every month that you continue to maintain poor power factor. The fact of the matter is this. Energy Star rated appliances only get the Energy Star rating if they offer a 25% – 30% reduction in energy usage and one addition that all of these appliances have are capacitors which were added to the AC motors circuitry in order to improve that appliances power factor. So my alternative to replacing every appliance in your home or business with an Energy Star rated appliance is to simply install one power factor conditioner to your main electrical panel and improve the power factor for your entire home or business. Spend the savings on your kids college fund!