Do "Power Saver" Devices Actually Cut a Korean Factory Bill?

If someone has pitched your factory a device that "reduces your electricity bill," the test is not the manufacturer's material but the order in which KEPCO calculates the charge. The charge is calculated as the sum of a fixed set of lines, so any device has to actually move one of those lines for the amount to fall. Establish which line the device touches and the ceiling on its effect can be calculated.

Let us disclose this first. We are a KEPCO in-house venture that provides power cost reduction software, so we may be in competition with the devices this article discusses. For that reason we name no specific company or product, and set out only the test, so that readers can do the calculation themselves.

What do power savers claim to do?

The question "does it work" only produces an answer once you turn it into "which cell of our bill does it move, and by how much?"

Which lines is the electricity bill calculated from?

A KEPCO bill is calculated in the order below. This is a structure we reproduced down to a zero-won difference against three bills for July 2026 (our own measurement, July 2026).

The key point is that the power factor charge is a proportional adjustment to the basic charge. It is not a line that attaches to consumption (kWh).

The climate and environment charge at KRW 9.0/kWh and the fuel cost adjustment charge are proportional to consumption alone, so however much you improve the power factor, those two cells do not move. The tariff structure as a whole is set out in the structure of industrial electricity tariffs.

How much does the bill fall if you improve the power factor?

At most 1.0% of the basic charge. Article 43(2) of the Basic Terms of Supply provides that where the lagging power factor between 08:00 and 22:00 exceeds 92%, up to 97%, the basic charge is discounted by 0.2% for each 1% above that.

From 92% to 97% is 5 percentage points, so 5 × 0.2% = 1.0% is the ceiling on the discount.

The other direction is much larger. If the lagging power factor falls short of 92%, 0.2% is added for each 1% down to 60%, for a maximum of 6.4%, and the leading power factor between 22:00 and 08:00 carries a surcharge of up to 7.0% measured against a 95% benchmark.

The surcharge is 7 times larger than the discount. And for the leading power factor there is no discount at all.

The widely quoted "90% power factor benchmark" differs from the Terms as they now stand. The calculation is covered in the power factor and the power factor charge.

Are power factor improvement and saving electricity the same thing?

They are different. The power factor is an adjustment rate applied to the basic charge, while saving is a matter of reducing energy consumption (kWh). Even if you raise the power factor from 92% to 97%, the kWh the factory used is unchanged, so the energy charge, the climate and environment charge and the fuel cost adjustment charge do not fall by a single cell.

So the phrase "we improved the power factor and cut the electricity bill by x%" mixes two things together. If you have received a proposal, check first whether the saving is stated against the billed amount or against the basic charge.

1.0% of the basic charge and 1.0% of the billed amount are entirely different amounts.

Do devices that lower your peak work?

It splits by customer type. The basic charge is calculated by multiplying the unit price by billing demand rather than contract power, and there are two ways that billing demand is determined.

Low-voltage customers with contract power of 20kW or more fall under Article 68(2) even with a maximum demand meter fitted. Billing demand is fixed at contract power, so however hard you suppress the peak, the basic charge stays where it is.

At all six low-voltage sites in our own production data, the billing demand charged was the same as contract power (as we observe it, July 2026). At a plant like that, the only route to reducing the basic charge is reducing contract power.

Why do cases of the bill falling come up, then?

Because even where the bill did fall between before and after installation, there are many variables that stop you concluding it was the device. The four below are the main ones.

The second in particular causes a lot of misunderstanding. Billing demand is the highest figure among the six designated months and the current month, so the moment last summer's high peak drops out of the window, the basic charge falls without your doing anything (what maximum demand is).

What conditions have to hold for it to work at our plant?

The conditions are clear.

The power factor improvement family delivers most when your current average lagging power factor falls short of 92% and you are paying a surcharge. In that case you are removing a surcharge of up to 6.4%, which is an order of magnitude away from the 1.0% discount. Conversely, if you are already close to 97%, there is nothing more to gain.

The peak control family is meaningful at a plant that is a customer under Article 68(1) and where short, sharp peaks are actually recorded in December, January, February, July, August and September.

A plant whose load factor is already high and which runs flat has no summit to push down in the first place.

How do you verify before against after?

You look at 15-minute usage data and the amounts of the individual bill lines together. Compare the billed total alone and it all gets buried under the four variables above.

For the power factor charge, the first month in which an additional charge arises brings only notice of the charge, and billing starts from the second month (Article 43(3) of the Terms). That is why you cannot decide on one month alone straight after installation. How to obtain the data is set out in how to get your KEPCO usage data.

What are the risks of installing it wrongly?

Fit too many capacitors and you tip into a leading power factor at night. Then, in trying to gain the 1.0% discount, you end up paying a surcharge of up to 7.0%.

Beyond that, installing capacitors in excess of the appropriate capacity is a ground for suspension of supply under Article 45(3), item 8 of the Basic Terms of Supply.

Power factor improvement is not a matter of "the bigger the better" but one in which sizing the capacity is everything, and it belongs to the electrical safety manager. That said, low-voltage customers are not subject to the leading power factor charge (Article 43(2), item 2(c) of the Terms).