Utility demand charges and power factor penalitites are not normally directly related.
A demand charge is a fee the utlity charges for having to provide equipment that will meet your peak KVA loading (even if they bill you per KW). A ratchet clause says they get to charge you at your highest demand rate for the next 12 months even if you never hit that level again. When calculating pay back remember it may take many months before your billed rate "ratchets down". I have at least 1 customer that will stop production in order to not exceed a specific demand level.
Power factor penalties are very utility dependent. Some will even have a larger penalty for exceeding "unity" then they do for being below it. I target my calculations at .95, this allows me to usually fall between .92 and .98 by the time I am done.
In my immediate area there is no major utility that imposes a PF penalty. They used to have incentives to correct PF but those ended almost 10yrs ago. now almost all PF is done to improve the customer's system performance only.
