Voltage at transformer terminal increases.You can utilise
full KVA of transformer.Electricity company asks to
maintain pf near to unity to reduce the losses in
transmission as the current reduces reducing the I2R loses.
This is why we get incentive on energy charges from supply
company.

The power= Voltage*current*power factor... So when the
power factor is equal to or naer 1 the input voltage and
curret is fully utilised.. so losses..But we can't made the
Power Factor more than 1 in Practical life..

If the power factor is unity that means the load is
resistive load and as the load with lpf wil draw high
current and load with high pf wil draw less current ,so we
have less losses and the pf can never bemore than 1 because
the cosine function varies a max. of 1.
Since load is resistive the output waveform is
purely a sinusoidal waveform without any diturbances

Power = 1.734 x V x Ix cos@
Say the power factor is 1 unity.
P=1.734x400x1x1=698.2watts. This much power need to send
from Power statin to do some work. The energy meter will
read the unit as same for this value. But if the power
factor is less or more say 0.8
P-1.732x400x1x.8=554.24watts. This much watts only will
read the meter. Remaining amound send from power station
willnot in calculated and is in losses.Remaining around 150
watts loss in same work.Thats why EB insisting to maintain
unity instead of lagging or leading.

Maintaining unity power factor reduces losses in
distribution and in switchgear system not in actual power
consumption. If we maintain the power factor above 1 there
will be more losses in distribution transformers and
capacitors(which are used to increase PF). The capacitive
power reduces the inductance power in transformer thereby
increasing the losses.

A power factor of one or "unity power factor" is the goal
of any electric utility company since if the power factor
is less than one, they have to supply more current to the
user for a given amount of power use. 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.

while calculating demand in my company the present load in
kw is 212.... there 125kvar capacitor bank is installed by
spliting as 50 in departments...the diasplay in panek biard
shows 175kw... how could we know the amount of kvar used to
compensate the kva