Reactive power compensation penalty may arise when electricity facilities incur additional costs from the energy provider due to a low power factor. A low power factor is a condition that reduces energy efficiency, and energy providers typically impose additional costs on facilities with a low power factor. If the ratio of Inductive Reactive Power to Active Power exceeds 20% at the end of the month or the ratio of Capacitive Reactive Power to Active Power exceeds 15%, the retail sales company multiplies the exceeded amount by the penalty unit price and adds it to the invoice.

Whether these penalties can be canceled depends on various factors:

1. After the compensation penalty, once the control of devices such as capacitors and relays causing reactive power consumption, and the repair or replacement of faulty ones have been performed, compensation penalties can be canceled by writing a petition to the relevant retail sales company, once a year.

2. Contract Terms: First, you will need to review your electricity supply contract. Check if there are any provisions or agreements regarding reactive power compensation or power factor in the contract. Compliance with contract terms may make it more possible to cancel the penalty.

3. Reactive Power Compensation: Reactive power compensation can be improved by using devices such as capacitors or inductors that correct low power factor. This correction improves the power factor and can help prevent penalty payments.

4. Communication and Negotiation: By communicating with your energy provider and negotiating for the necessary adjustments for a facility with a corrected power factor, you can negotiate for the cancellation of penalties. Depending on the policies of your energy provider and local regulations, it may be possible to change or cancel penalty conditions through negotiations.

5. Legal Regulations: Some countries may have legal regulations that limit the penalties imposed by energy providers on facilities with a low power factor. Such regulations can facilitate the limitation or cancellation of penalties.

The best step for the cancellation or reduction of penalties is to communicate with your energy provider and examine local regulations. Correcting the power factor of your electrical facility can reduce energy costs in the long run and prevent penalty payments.