"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.