The tariff imposed by the utility is a consequence of failing to satisfy THE MAIN reason we use PFC
… which is to optimize (minimize) the kVA rating of the TF, Gen and cables supplying the PFC connection point.
if you don’t they may need to be larger ratings than suggested by just the kW rating of the load.
As an example :-
If you have a 800 kW motor at 0.8 PF, that means actually 1000 kVA required Gen, TF and cables
… but if you install 0.6 kvar PFC, then you only need a 800 kVA Gen, TF and cables to the Cap Bank location.
You STILL need 1000 kVA rated cables from the Cap Bank to the 800 kW 0.8 PF motor.
PFC is all about maximum amp rating of the utility connection assets required without melting the cables or windings.