Application Note

2 Fluke Corporation The costs of poor power quality
The interdependence of various
systems adds layers of com-
plexity to power quality issues.
Your computers are fine, but the
network is down so nobody can
book a flight or file an expense
report. The process is operat-
ing correctly, but the HVAC has
shut down and production must
stop. Mission-critical systems
exist throughout the facility and
throughout the enterprise—power
quality problems can bring any
one of these to a grinding halt at
any time. And that will usually
be the worst possible time.
Where do power quality prob-
lems come from? Most originate
inside the facility. They may be
due to problems with:
• Installation—improper ground-
ing, improper routing, or
undersized distribution.
• Operation—equipment
operated outside of design
parameters.
• Mitigation—improper
shielding or lack of power
factor correction.
• Maintenance—deteriorated
cable insulation or grounding
connections.
Even perfectly installed and
maintained equipment in a
perfectly designed facility can
introduce power quality prob-
lems as it ages.
The direct measurement of
wastes due to poor power qual-
ity can be achieved with the
Fluke 430 Series II instruments,
which directly measure waste
due to harmonics and unbalance,
and quantify the cost of that
waste based on the unit cost of
power from the utility.
Power quality problems can
also originate from outside the
facility. We live with the threat
of unpredictable outages, volt-
age sags, and power surges.
Obviously, there’s a cost here.
How do you quantify it?
Measuring power
quality costs
Power quality problems make
their effects felt in three general
areas: downtime, equipment
problems, and energy costs.
Are you an OEM producer? If
you can’t make timely deliveries,
your customer may switch to a
source that can.
Equipment problems
Exact costs are hard to quantify,
because you are dealing with
many variables. Did that motor
really fail from excess harmon-
ics, or was there some other
cause? Is Line Three producing
scrap because variations in the
power supply are causing varia-
tions in machine performance?
To get the correct answers, you
need to do two things:
1. Troubleshoot to the root
cause.
2. Determine the actual costs.
Downtime
To quantify system downtime
costs, you need to know two
things:
1. The revenue per hour your
system produces.
2. The costs of production.
Also, consider the business
process. Is it a continuous, fully
utilized process (e.g., a refinery)?
Must your product be consumed
when produced (e.g., a power
plant)? Can customers instantly
switch to an alternative if the
product is not available (e.g., a
credit card)? If the answer to any
of these questions is yes, then
lost revenue is difficult or impos-
sible to recover.
Let’s walk through an example. Your factory makes 1,000
widgets per hour, and each widget produces $9 of revenue. Thus,
your revenue per hour is $9,000. If your costs of production are
$3,000 per hour, your operating income is $6,000 per hour when
production is running. When production is down, you lose $6,000
per hour of income and you still have to pay your fixed costs
(e.g., overhead and wages). That’s what it costs to be down. But,
downtime has other costs associated with it:
• Scrap. How much raw material or work in process do you have
to throw away if a process goes down?
• Restart. How much does it cost to clean up and restart after an
unplanned shutdown?
• Additional labor. Do you need to pay overtime or outsource
work to respond to a downtime incident?
Here’s an example. Your factory is making plastic webbing that
must be of uniform thickness. Operators consistently report high
scrap rates in the late afternoon. You can directly trace machine
speed variances to low voltage caused by heavy HVAC loads. The
operations manager calculates the net scrap costs are $3,000 per
day. That’s the revenue cost of your low voltage. But, don’t forget
other costs, such as those we identified for downtime.