In an AC circuit the power is often less than the voltage times the current, and the power factor describes how much less.
A resistive load has a power factor of 1 but an induction motor might have a power factor of 0.7 so the power is equal to the volts times the amps times 0.7.
Power companies do not like a poor power factor because it places an undue load on the power system that the companies receive no revenue for, because consumers are normally billed for the true energy consumed. High-power users like factories may be billed extra if they present a poor power factor, which might induce them to improve the power factor.
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Power (noun):