Same 200,000 kWh, Different Bill: What Load Factor Does

Two factories that used exactly the same 200,000 kWh of electricity get different bills. It is not that the unit prices differ, nor that they are on different contract types. What differs is how evenly they used it — the load factor.

What is load factor?

Load factor is the average power over a given period divided by the maximum demand in that period. 100% means you ran without a break at peak level; 30% means your ordinary usage was far below your peak. Depending on the source it is also called the "power utilisation rate."

One thing has to be noted, though. Load factor is not a term from KEPCO's Terms. Neither "load factor" nor "power utilisation rate" appears anywhere in the Basic Terms of Supply or the Implementation Rules (checked exhaustively against the text in force 1 July 2026).

The terms the charging provisions use are maximum demand and billing demand; load factor is an industry indicator that summarises those two in a readable form. That is why you will not find a load factor on your bill.

Read it the other way round and it comes to this. A low load factor means there are short, sharp peaks. The value falls at plants that switch equipment on all at once, or where one particular process draws heavily for a moment.

How do you calculate load factor?

Load factor (%) = energy consumption (kWh) ÷ (maximum demand (kW) × hours in the period (h)) × 100. For a single month, the hours in the period are the number of days in the meter reading period × 24.

A worked example — an example assuming both plants used 200,000kWh in one month (30 days = 720 hours).

The kWh that the energy charge rests on is the same. The only thing that differs is maximum demand, and that difference splits the basic charge.

Why does a low load factor cost you?

Because the basic charge is levied on the peak, regardless of consumption. A low load factor means you are paying for the level of a peak you touched for a moment across the whole month.

Customers under Article 68(1) of KEPCO's Basic Terms of Supply use the highest of the maximum demand figures from the designated months as their billing demand. Plant B above used the same 200,000 kWh as Plant A yet has to spread a larger basic charge over it, so its effective price per kWh goes up.

What value the basic charge is multiplied by is set out in how the basic charge is calculated.

The same provision also has a floor. If the maximum demand in the designated months is below 30% of contract power, 30% of contract power becomes the billing demand. Even if you cut operations sharply, the basic charge does not fall below that.

What load factor counts as normal?

Because the normal range varies with the industry, the shift system and the equipment mix, comparing yourself with another factory's number is meaningless. A three-shift continuous-process plant and a daytime single-shift assembly plant cannot produce the same value.

What you compare against is the same month last year at your own plant. If the load factor has fallen under the same operating conditions, that is a signal that a new peak has appeared, and finding out when it was recorded is the next thing to do.

How do you raise the load factor?

Lowering the denominator (the peak) comes before raising the numerator (consumption). Using more electricity does raise the load factor, but it also raises the bill. The objective is the bill, not the indicator.

How the unit prices split by time of day is set out in off-peak, mid-peak and peak hours.

If your load factor is high, which tariff works out better?

The more evenly and continuously a plant runs, the more a tariff with a cheap energy charge unit price works in its favour. That is because an optional tariff is structured as a trade between the basic charge unit price and the energy charge unit price. The direction is plain to see in the energy charge unit prices for Industrial (B) high-voltage A.

Unit prices differ by season. Separate values are published for summer and for spring and autumn even within the same time band, so comparing on one season's values alone will skew your judgement. Below, all three seasons are laid out (per kWh).

Source: Basic Terms of Supply, Appendix 1 (monthly electricity tariff table), Industrial Power (B) High-Voltage Power A, in force 2026.07.01. All eighteen cells across the three seasons were checked against the original text.

In every one of the three time bands in all three seasons, Optional II is exactly KRW 5.5 per kWh cheaper. In exchange, Optional II has a higher basic charge unit price (Optional I at KRW 7,220 per kW, Optional II at KRW 8,320 per kW).

Since the basic charge goes out whether you use power or not, while the energy charge goes out in proportion to what you used, a plant that runs a lot and for long hours is better off with the cheaper energy charge, and a plant that runs occasionally is better off with the cheaper basic charge.

That said, do not decide on a simple hours-based rule of "above so many hours a month, use this tariff." When unit prices change, the break-even point moves with them, and which option wins flips by season. You have to recalculate every tariff on your last 12 months of actuals and compare the annual totals — the order in which to make that judgement is in how to choose an optional tariff.

Will the bill fall if you just raise the load factor?

No. Load factor is an outcome indicator, not a charge line. There is no "load factor charge" anywhere on your bill. If the load factor went up because you lowered the peak, the bill falls; if it went up because you increased night-time usage, it may well rise instead.

So load factor is used only as a starting point for judgement. If the value is low, you go looking for the peak; if it is high, you move on to recalculating tariffs. In both cases the next step is opening up your actual usage data, and how to obtain it is set out in how to get your KEPCO usage data.