Michigan · investor-owned utility
Indiana Michigan Power (AEP): power factor rules
In Michigan, I&M's Large General Service rate charges for excess kVA demand, and its Large Power rate charges or credits reactive demand. The rate book we read may since have been replaced, so figures need checking.
Partly confirmed Tariffs checked 2026-10-03
Smaller customers
Tariff GS has no power-factor provision.
The power-factor rule
Tariff LGS Large General Service; Tariff LP Large Power
Applies to: In the reviewed M.P.S.C. 18 tariff, LGS applies above 100 kW until the 12-month average exceeds 1,500 kW. LP requires billing demand of at least 600 kW and contract capacity of at least 2,000 kW. A successor tariff appears to exist, so current applicability must be checked.
How it works: LGS: an excess kVA demand charge applies to kVA demand above the greater of 101% of the maximum metered kW or 60 kVA. LP: a reactive demand charge or credit per kVAr above or below 50% of kW. The reviewed LP reactive-demand provision covers leading or lagging reactive demand.
"The excess kVA demand, if any, shall be the amount by which the monthly kVA demand exceeds the greater of (a) 101 % of the maximum metered kW demand or (b) 60 kVA."
Note: possibly superseded by M.P.S.C. 19 (reported effective June 30, 2026; not reviewed).
Source: M.P.S.C. 18 – Electric, Indiana Michigan Power Company, State of Michigan, Original Sheet D-31.00 (LGS); D-36.00 (LP). Effective July 15, 2024. Checked 2026-10-03; review by 2027-10-03.
Caveats
- A newer rate book (M.P.S.C. 19, effective June 30, 2026) appears to exist, but we could not read it, so these figures may have changed. Send us your bill and we'll check.
What to do next
- Size the kVAR for your load.
- Send us a bill and we'll tell you what you're paying and what correction is worth.
Cities we serve in Indiana Michigan Power (AEP) territory
Tariffs change. This summary reflects the documents cited above as checked on 2026-10-03; your utility's current rate schedule and your bill govern what you pay.