A Mexican industrial plant running at a metered power factor of 0.82 pays 5.9% more on every CFE invoice. The charge is not a fine. It is a formula, published by the Secretaría de Hacienda y Crédito Público in the Diario Oficial de la Federación on 31 October 2000, that the supplier applies to the billed amount whenever the power factor for the period falls below 90%. Per million pesos of monthly billing, a power factor of 0.82 costs MXN 59,000 a month.
Two things are routinely misstated about that charge, and both send a plant manager to the wrong document and the wrong counterparty. The 90% threshold belongs to the tariff, not to the Código de Red. The money is a billing adjustment computed by the basic supplier, not a sanction imposed by a regulator. The Código de Red does set a power factor obligation, and it is a different obligation. It is stricter, it is measured over five minute windows rather than over the billing period, and it reaches only load centers connected at alta tensión.
The tariff surcharge is arithmetic and can be priced from twelve invoices in an afternoon. The grid code obligation is a separate compliance question that turns on connection voltage. Both point to the same equipment, and neither should be acted on before the harmonic survey.
How the surcharge is calculated
The 2000 disposition sets two formulas. Below 90% the supplier applies a recargo of 3/5 x ((90 / FP) - 1) x 100, expressed as a percentage of the billed amount. At 90% or above it applies a bonificación of 1/4 x (1 - (90 / FP)) x 100. The recargo is capped at 120% and the bonificación at 2.5%. Both results are rounded to one decimal place.
The caps show where the instrument bites. A 120% recargo requires a power factor of 30, which no functioning plant reaches, so that cap is decorative. The bonus cap is the opposite. The formula returns exactly 2.5% at unity, so the full bonus exists only in theory, and 0.98 already returns 2.0%.
The base the percentage is applied to matters as much as the percentage. The 2000 acuerdo applies it to the amount of the invoice, with no wording that narrows it to particular charge lines. Reactive correction moves that one adjustment line. It does not reduce kWh, and any saving claim built on kWh is measuring the wrong thing.
The disposition also works from the power factor for the billing period, not from the reading on a switchboard display. A plant can watch 0.94 on the controller at midday and still be billed at 0.86, because the billed figure carries night shifts, weekend idling and every hour when transformers are energized and nothing is running.
What each power factor reading is worth
The table below is the published formula evaluated at several readings, scaled to MXN 1,000,000 of monthly billing. Multiply by your own billed amount to get your number.
| Metered power factor | Tariff adjustment | Per MXN 1,000,000 billed, monthly |
|---|---|---|
| 0.75 | 12.0% recargo | MXN 120,000 charged |
| 0.80 | 7.5% recargo | MXN 75,000 charged |
| 0.85 | 3.5% recargo | MXN 35,000 charged |
| 0.88 | 1.4% recargo | MXN 14,000 charged |
| 0.90 | none | zero |
| 0.95 | 1.3% bonificación | MXN 13,000 credited |
| 1.00 | 2.5% bonificación | MXN 25,000 credited |
Read the spread between 0.85 and 0.95 rather than the individual rows. On MXN 1,000,000 of monthly billing that gap is worth MXN 48,000 a month, or MXN 576,000 a year, and it is the swing a correction project buys. At MXN 3,000,000 a month the same spread is roughly MXN 1.7 million a year.
Where the 90% figure comes from and where it does not
The Código de Red was issued by the Comisión Reguladora de Energía as resolution RES/151/2016, published in the DOF on 8 April 2016. CRE reissued it as RES/550/2021, published in the DOF on 31 December 2021 and in force since 1 January 2022. CRE holds compliance and sanction authority over it. CENACE operates the system and the market and does not issue or enforce the code, which is a frequent attribution error in trade coverage.
The code applies to load centers at media tensión, above 1 kV and up to 35 kV, and at alta tensión, 35 kV and above. The parameter lists differ. CRE's guidance for load centers places power factor, current harmonic distortion and voltage flicker in the alta tensión set only. A media tensión load center is answerable for voltage variation, transient voltage, frequency variation, short circuit contribution, protections, control systems, information exchange and current imbalance, and not for power factor.
For an alta tensión site the code asks for a power factor between 0.95 lagging and unity, evaluated in five minute intervals and held for 95% of the month under the Manual de Conexión that forms part of the code. Measurements are expected from Class A instruments under NMX-J-610/4-3-ANCE or IEC 61000-4-30. Load centers already connected on 8 April 2016 had until 9 April 2019 to comply with the 2016 resolution. CRE does not authorize or certify firms to perform these studies, so a quotation that presents a signature from an approved verifier as a legal requirement is selling something the regulation does not ask for. This is one of several places where what the Código de Red requires of load centers is misdescribed in the market.
The practical reading is short. Most manufacturing plants in Mexico sit at 13.8 kV or 23 kV, carry no grid code power factor obligation at all, and still pay the tariff surcharge every month. Sites at 35 kV and above carry both, and clearing the tariff's 90% for the billing period says nothing about whether the five minute test passes 95% of the time.
What correction changes in the plant
At the same real load, a bus running at 0.82 draws 15.9% more current than the same bus at 0.95. Resistive losses in cable, switchgear and transformer windings scale with the square of that current, so the move removes about a quarter of the copper loss on the affected feeders. That is a heating and aging argument for the maintenance case, not for the savings case. The kWh involved are small next to the tariff adjustment.
Released capacity is usually the larger prize. A 1,500 kVA transformer serving 1,200 kW at 0.82 is carrying 1,463 kVA, which is 97.6% of nameplate. The same 1,200 kW at 0.95 draws 1,263 kVA, or 84.2%. A plant that was told it needs a second transformer to add a line should check its power factor before approving the capital. Voltage behavior improves for the same reason, and unstable voltage at the point of common coupling is one of the disturbance mechanisms discussed in our note on power quality in industrial plants.
Sizing the bank, and the harmonic check that comes first
Required compensation is kW multiplied by the difference between the tangent of the present phase angle and the tangent of the target. A 1,500 kW load moving from 0.82 to 0.95 needs about 555 kVAR. Pushing the same load to 0.98 needs about 740 kVAR. That last step is worth thinking about. It adds a third more kVAR to collect 0.7 additional percentage points of bonificación, which rarely clears a plant's payback threshold.
Before that arithmetic turns into a purchase order, measure the harmonics. Plain capacitors on a bus carrying variable speed drives, rectifiers or induction furnaces form a parallel resonant circuit with the supply inductance. If the resonance lands near the fifth or seventh harmonic, current at that order is amplified and the capacitors are usually the first thing to fail. IEEE Std 519-2014 sets the recommended limits at the point of common coupling and is the reference most Mexican specifications point to. Where drive load is heavy, detuned reactors ahead of each stage move the resonance below the fifth harmonic.
One recording supports both decisions. Log power factor, total harmonic distortion and demand together at the main incomer across a full production cycle, weekend included. That file sizes the kVAR, decides whether the stages need detuning, and sets the baseline the corrected invoice is checked against.
The failure that keeps the charge on the bill
Capacitor banks fail quietly. A fuse opens on one stage, a contactor welds, a cell dries out, and the controller keeps calling for capacity that no longer switches in. Production does not stop and no alarm sounds. The only evidence is the adjustment line on an invoice that accounts payable pays without reading. On the engagements Mexico Energy Partners has run, a bank commissioned correctly and then left unattended is the most common reason a corrected plant drifts back below 90%.
The control is cheap. Bring the controller's stage status into the plant's alarm system, trend the metered power factor daily rather than monthly, and put the invoice adjustment line on the same review as demand. Continuous energy monitoring turns a twelve month billing surprise into a same week work order. Operator training does not belong on this list. Power factor is set by connected load and by correction equipment, not by behavior on the floor.
What to do this month
Pull the last twelve CFE invoices and add up the power factor adjustment line. If the annual total sits above a few hundred thousand pesos, the correction is a straightforward capital request and the arithmetic above sizes it. If the site is at 35 kV or higher, treat the grid code obligation as a separate exercise with its own five minute evidence, because a passing monthly average will not satisfy it. In either case, book the harmonic recording before the kVAR quotation, not after.
Find out what your power factor is costing you
Mexico Energy Partners reads the power factor adjustment line across twelve months of CFE invoices, sizes the required compensation in kVAR against measured demand, and checks harmonic content before recommending equipment. Send the twelve invoices, a single line diagram of the plant's distribution, and the connected load list including every variable speed drive. You get back the annual exposure, the kVAR range, and whether detuned stages are indicated. No savings figure is quoted before the recording is taken.
Sources
- Secretaría de Hacienda y Crédito Público, "Acuerdo que modifica las disposiciones complementarias a las tarifas para suministro y venta de energía eléctrica", Diario Oficial de la Federación, 31 October 2000. Recargo and bonificación formulas, the caps, and the billing period basis.
- COMPITE and Deutsche Gesellschaft für Internationale Zusammenarbeit, "Tarifas Eléctricas: Tutorial para el trabajo en campo", 2015. The recargo and bonificación formulas.
- Comisión Reguladora de Energía, resolution RES/151/2016, "Disposiciones administrativas de carácter general que contienen los Criterios de eficiencia, calidad, confiabilidad, continuidad, seguridad y sustentabilidad del Sistema Eléctrico Nacional: Código de Red", Diario Oficial de la Federación, 8 April 2016. Issuing authority, scope by voltage, and the 9 April 2019 compliance date.
- Comisión Reguladora de Energía, resolution RES/550/2021, Código de Red, Diario Oficial de la Federación, 31 December 2021. The reissued code in force since 1 January 2022, including the Manual de Conexión for load centers.
- Greenberg Traurig, "Código de Red, Disposiciones Administrativas de Carácter General que contienen los criterios de calidad y sustentabilidad", gtlaw.com, 11 January 2022. The power factor band of 0.95 lagging to unity, five minute measurement, and 95% of a monthly period.
- Comisión Reguladora de Energía, "Guía sobre los requerimientos técnicos del Código de Red aplicables a Centros de Carga", gob.mx. Parameter lists by voltage level, Class A instrumentation, and the absence of a CRE verifier scheme.
- Institute of Electrical and Electronics Engineers, "IEEE Std 519-2014, IEEE Recommended Practice and Requirements for Harmonic Control in Electric Power Systems", 2014. Harmonic limits at the point of common coupling.