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Energy Load FAQs

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• What is a kilowatt (kW)?

  One kilowatt equals 1,000 watts.

• What is a kilowatt hour (kWh)?

  The energy consumed by the use of one kilowatt of electricity for one hour.

• What is electric demand?

  Electric demand refers to the maximum amount of electrical energy that is being consumed at a given time, measured in kilowatts.

• What is power factor?

  Power factor is the ratio of working power to total power. Low power factor is caused by inductive loads (such as transformers, electric motors, and high-intensity lighting), which are a major portion of the power consumed by industrial complexes. Unlike resistive loads that create heat by consuming kilowatts, inductive loads require the current to create a magnetic field, and the magnetic field produces the desire work.
  
  The total power required by an inductive device is composed of:

  • Working power, measured in kilowatts
  • Non-working power caused by the magnetizing current required to operate the device, measured by kilovars

  The nonworking power required by inductive loads increases the amount of total power in your distribution system, resulting in a lower power factor.

• How does a facility improve its power factor?

  There are a number of ways to improve power factor, including

  • Minimizing operation of idling or lightly loaded motors
  • Avoiding operation of equipment above its rated voltage
  • Replacing standard motors as they burn out with energy-efficient motors
  • Installing capacitors

• What is an interval data recorder (IDR) meter?

  An IDR is a meter that is capable of measuring and recording energy usage at specific time intervals, providing owners and managers insight into their facilities’ electricity usage so they can better manage overall costs.

• Why did NIPSCO file the electric rate case?

  Since NIPSCO’s last base rate increase 21 years ago, the cost to produce and deliver electricity has gone up, while customers’ base rates have remained unchanged. The rate increase will allow us to maintain our facilities and equipment and increase generating capacity to ensure we can continue to provide safe, reliable energy to meet the increasing demand.

• What is load factor?

  Load factor is the ratio of the average energy use in kilowatts during a designated period to peak energy use in kilowatts occurring during that same period. If all electric loads are turned on fully and never turned off, this would be a load factor of 1.0. Load factor can be calculated using the following formula:
  Load Factor = monthly kWh / monthly peak KW demand X (days of the month) X 24 hours.
  Demand rate structures are designed to reward customers for operating with a high load factor.

• What is the importance of load factor?

  NIPSCO must balance its generation and transmission capacity to ensure it can meet a customer’s peak demand for electricity at all times. Since load factor is an expression of how much energy was actually used compared to peak demand, a demand rate customer can reduce the average cost per kilowatt hour by improving their load factor by reducing their peak demand. Controlling load factor is one way demand rate customers can control electric costs.

• How does a facility improve it load factor?

  Lowering a facility’s peak demand is a key step to improving load factor and will reduce the amount paid per kWh for electricity for customers on a demand rate structure. Look at how and when you use electricity to find possible ways to control your load factor. Install higher efficiency lighting or air conditioning. Scheduling or staggering large electric loads so they don’t start up at the same time may also help.