Power factor is a measure of efficiency in the use of supplied power.  Mathematically, it is the relationship between Working Power (power that does the "work" for the system such as the motors which power equipment) and apparent power which is the sum of working power and reactive power (power required to sustain the electromagnetic field required by motors, transformers and relays for them to operate). 

Inefficient use of power means that more power must be supplied by utilities to meet a company's needs.  Electrical items which are staples for many facilities - such as variable frequency drives, uninterruptible power supplies, motors, even some lighting banks - are notoriously inefficient and therefore have very poor power factor.  So the problem lies not just with large manufacturers, or heavy computer users.  Virtually every facility can benefit from some level of power factor correction.  Just how much correction is needed is a function of economics - but all facilities can benefit from a reduced carbon footprint which results from improving power factor. 
 

Improved Power Factor Reduces Carbon Footprint
 

Let's assume that a typical plant has a 1500 KVA demand and uses 500,000 kwh/month.  Typical I (squared) R losses can be as high as 2% of the kwh consumption, resulting in 120,000 kwh saved annually.  Transformer loss reduction can account for an additional 10% kwh loss as well.  (On average, a kwh produced in the US generates about 1.25 lb of CO2. This is derived from US gov't data for electrical demand and carbon footprint.- Actual figures may vary from 0.8 lb to 2 lb per kwh depending on the percent of electricity generated by coal, oil, gas or non-fossil fuels such as nuclear, hydro, solar or wind.

In addition to the carbon footprint reduction, there is another reason that power factor correction should be "top of mind."  Recall that the inefficiency hinders not the user but the supplier of power because more energy is required due to the inefficiencies.  Utilities which are strapped for capacity are unable to supply more electricity without major capital investments.  Rather than absorb this internally, utilities are increasingly restructuring their rate plans to include a surcharge for poor power factor or a charge per kVA.  As a result, users with poor power factor are paying additional sums to support their inefficient usage habits.  So correcting this poor power factor can mean a reduction in utility costs or an avoidance of surcharges. 

While individual circumstances vary according to equipment in use at the facility, how the utility charges for electricity, what the starting power factor is, and what equipment is required to correct it - it is generally worthwhile exploring power factor and discussing corrective actions.  Additional information is available from many sources - including http://www.stacoenergy.com/financial-power-diet.htm.   Who knows - in addition to reducing your carbon footprint, you might also be able to "green" your bottom line.