However, the average power in an AC circuit expressed in terms of the rms voltage and current is where is the phase angle between the voltage and current. In so doing, they incur more line losses. They also must have larger capacity equipment in place than would be otherwise necessary. As a result, an industrial facility will be charged a penalty if its power factor is much different from 1. This is primarily the result of having a lot of electric induction motors - the windings of motors act as inductors as seen by the power supply.
Capacitors have the opposite effect and can compensate for the inductive motor windings.
Some industrial sites will have large banks of capacitors strictly for the purpose of correcting the power factor back toward one to save on utility company charges.