In an electric power system, a load with a low power factor draws more current than a load with a high power factor for the same amount of useful power transferred. The higher currents increase the energy lost in the distribution system, and require larger wires and other equipment. Because of the costs of larger equipment and wasted energy, electrical utilities will usually charge a higher cost to industrial or commercial customers where there is a low power factor. As an example if the load power factor on a site is 0.7, the apparent power would be 1.4 times the real power used by the load. This extra power required will cost you in kWh charges, reactive charges and can also increase your allocated site supply unnecessarily which will incur the DCP 161 charges.