Why Power Quality Matters

Previous newsletters have highlighted the technical consequences of unbalanced voltages, phase-shift variations, and harmonic disturbances. Yet, many in financial disciplines still fail to recognize the economic implications. These issues silently erode profitability—both in the short term and over the long haul.

Immediate Financial Impact

Short-term losses often hide in plain sight—buried within monthly electricity bills under Cost of Sales. Most financial officers pay these bills without scrutinizing line items such as:

  • Access Charges
  • Peak, Standard, and Off-Peak kVAh Charges
  • Demand Charges

While kWh charges draw attention due to their size, kVAh charges are often overlooked. Yet, reducing kVAh charges to zero can significantly lower overall energy costs. The culprit? Reactive Power (kVAR)—the imaginary component of AC power that contributes nothing to production but inflates your bill.

Real vs Apparent Power

All users—residential, commercial, and industrial—pay for Apparent Power (kVA) but only benefit from Real Power (kW). Reactive Power increases due to poor power quality, driving up consumption charges. For example, a substation analysis in Gauteng revealed a kVA to kW ratio of 3.37:1—meaning customers were paying 237.27% more than necessary.

Maximum Demand Penalties

Large power users also face monthly charges for agreed Maximum Demand. Exceeding this threshold—even briefly—triggers substantial penalties. Many businesses unknowingly overspend due to load-shedding and poor power factor correction. Negative Phase Sequencing can further damage plant equipment, compounding costs.

Operational Disruption & Labour Costs

Poor power quality leads to equipment breakdowns, frequent shutdowns, and lost production. Maintenance crews are often called in for emergency repairs, driving up labour costs. Temporary fixes become the norm, and operational efficiency suffers.

Long-Term Asset Degradation

Longer-term losses appear on the Balance Sheet—hidden in asset depreciation and replacement costs. Cables, motors, switchgear, and transformers fail prematurely under constant exposure to voltage imbalance and harmonic distortion. Zero-sequence currents accelerate wear, yet these costs are rarely flagged by finance teams.

Refurbishment and replacement expenses under Fixed Assets can skyrocket. Only professionals with cross-disciplinary insight recognize that these costs are avoidable—and not “business as usual.”

Is There a Solution?

Absolutely. Agulhas Utilities Corporation offers advanced Power Quality Monitoring to diagnose and resolve these issues. Our instruments record up to the 40th harmonic and monitor dozens of parameters including:

  • Voltage and current imbalance
  • Phase-shift variations
  • Total Harmonic Distortion (THD)
  • Inrush current and power factor

We recommend a one-week monitoring period. Once data is collected, we analyze it and provide actionable insights. If upstream utility issues are detected, we assist in escalating the matter with the relevant providers.

“Power quality isn’t just an engineering issue—it’s a financial imperative. Let us help you uncover the hidden costs and reclaim control.”