"Question: Please
explain the difference between billing based on KWH and KVA. The
benefits and conversions. "
kWh versus kVA
kilowatt-hour (kWh) is the measure
of energy consumption
(power over time). As an example, a 60 watt light bulb burns power at
the rate of 60 watts (or 0.060kW). In one hour, the bulb will consume
60 watts times 1 hour, or 60 watt hours). In 12 hours, that same bulb
will have consumed 60 watts times 12 hours, or 720 watt hours
(0.72kWh). Therefore, a kWh is a unit of energy.
There are two kinds of power being provided to a
given facility.
Kilovolt-Ampere (kVA) is a unit
of electrical power, often referred to as Apparent Power. This is what
the utility must supply to its customers on the primary side of the
facility transformer and is the basis for sizing power plants.
Kilowatt (kW) is also a unit of
electrical power (equal to 1,000 watts), referred to as Real Power.
This measure of power is also called demand. For
a 60 watt bulb, the demand would be 60 watts.
Different facilities may use the same
amount of real power (kW), but different supply levels of apparent
power (KVA) depending on the kind of equipment in the facilities.
Equipment with lots of magnetic fields (like motors) will require more
apparent power to feed the same real power demand. If you know the
kilowatt demand (real power), then you can calculate the electrical
energy consumed over time (kW x time = energy). There is
also a relationship between real power and apparent power that is
based on the concept of power factor. If you know your real power
(kW) and your power factor, you can calculate your level of
apparent power (KVA).
Determining kVA and kWh
The following is an equation that can be used to
determine kVA from kW:

Power Factor = kW/KVA
or
KVA = KW/Power Factor
If the useful power that the customer consumes is
described as "real power" (KW), then the component of lost power is
sometimes referred to as reactive power, or kilovolt amps reactive
(KVAR). The total amount of power that the utility has to supply to the
customer is given in KVA. If all electric loads were
resistive (as in lights, resistance heaters etc), we would not have to
worry about power factor. The electrical system would be operating at
its highest efficiency. But there are also motors, transformers and
capacitors that are components of electrical systems, and these devices
and others create induction and capacitance. The net effect of these
inductive and capacitive devices results in inefficiency. When this
happens, some of the energy is lost to generate the magnetic field of
the motor, or the energy is lost in the creation of the stored energy
for the capacitor.
For example to determine the kWh charge:
Let's say that your organization has
200 bulbs that are 60 watts each that are turned on for 12
hours each day. In 30 days, your electric bill would amount to 4,320kWh
(200 X 60w X 12hrs X 30 days divided by 1,000). This is the quantity of
energy consumed, and may cost you $302 if you are paying $0.07/kWh.
However, at any given moment,
your organization is provided power at the level of 12kW (200
bulbs X 60 watts each divided by 1,000 to get kilowatts). If your power
factor is 0.90, then the kVA provided would be 13 kVA (12 kW/0.90 power
factor). If your demand rate around $13 per kVA then your monthly bill
may also include a $169 (13 kVA x $13/kVA) additional demand charge to
the bill.