Load Factor

A utility's load factor is its average load as a percentage of its peak load. Think of it in terms of an airplane flying without all of its seats full. If the utility distributes power to a dedicated transformer at a customer's facility which has a 100-seat capacity and can fly 365 days a year, but only has 50 percent of its seats full, the customer's load factor is 50 percent. Large industrial customers can have load factors of more than 90 percent and customers such as convention centers can have load factors of under 10 percent. It is much more expensive to serve the customers with low load factors. The more high load factor customers a utility has, the higher the utility's own load factor will be. In this business, the higher the load factor, the better.

Airplane Analogy Graphic