For which of reason mentioned below does the electric supply company want to improve the power factor?

Effect of low power factor

• An electrical load with a poor power factor draws more current than a load with an improved power factor for the same amount of useful power transferred and can put unnecessary strain on the electricity distribution network. 
• Thus, the electric supply company wants to improve the power factor to reduce the effective current.
• Improving the power factor results in less current being drawn, therefore fewer electricity costs, less heat, and greater longevity of the electrical system. the installation, thus reduces the maximum demand tariff and thereby reduces your power costs.
• Poor power factors may cause power losses and voltage drops, which can contribute to overheating and failure of motors and other equipment.
• Hence, power factor improvement is necessary.
• Power factor improvement methods are nothing but a means of generating reactive power. The most commonly used methods are capacitor banks, synchronous condensers & Phase advancers. Capacitor banks are most commonly used as they are very cheap and require less maintenance.