For those that don't believe that _some_ customers pay for bad power factor, here is a copy of the tariff currently in force for PG&E (that's most of California) industrial customers whose peak demand is in excess of 1MW:
http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_E-20.pdfSo first off, these are large customers, obviously, and not residential. (I calculate an approximately 0% chance they'd roll out billing for VARs in a residential setting because the political backlash for 14M baffled customers will far outweigh the cost of condenser banks.)
The power factor adjustments are in section 7 of the pdf above. To wit:
"
The bill will be adjusted based upon the power factor. The power factor is computed
from the ratio of lagging reactive kilovolt-ampere-hours to the kilowatt-hours consumed
in the month. Power factors are rounded to the nearest whole percent.
The rates in this rate schedule are based on a power factor of 85 percent. If the average
power factor is greater than 85 percent, the total monthly bill will be reduced by the
product of the power factor rate and the kilowatt-hour usage for each percentage point
above 85 percent. If the average power factor is below 85 percent, the total monthly bill
will be increased by the product of the power factor rate and the kilowatt-hour usage for
each percentage point below 85 percent.
"
Ah, classic PG&E verbiage. Why provide an equation when a few hundred words will do.
Some interesting things here. What jumps out at me is that customers who have capacitive loads are not punished, but they also aren't rewarded, either. You can save 15% on your bill by moving your PF to unity, but you won't get paid to produce VARs. Too bad for computer data centers, which are one of the few industrial activities with a leading load.
EDIT: Power factor billing applies to customers with peak demand over 499kW. They're on a slightly different tariff:
http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_E-19.pdf