what is work of power factor?

                         what is work of power factor?
 The Advantages Of Maintaining A High Power Factor Capacitor Bank

A high power factor eliminates penalty dollars imposed when operating with a low power factor.
 For many years, most utilities demanded a minimum of 85% power factor as an average for each monthly billing.
 Now many of these same utilities are demanding 95%…or else pay a penalty!
 The actual wording or formula in the utility rate contract might spell out the required power factor,
 or it might refer to KVA billing, or it might refer to KW demand billing with power factor adjustment multipliers.
 Have your utility representative explain the particular rate contract used in your monthly bill.
This will insure you are taking the proper steps to obtain maximum rs savings by maintaining a proper power factor.