Legal Definitions - load factor

Definition: Load factor is a term used in two different contexts. Firstly, it refers to the ratio of a utility customer's usage levels during a given period compared to the customer's demand during peak periods. Secondly, it refers to an analysis of the number of passengers on an airplane or other common carrier compared to available capacity.

Load factor in the context of electricity usage:

Suppose a household uses 1000 kilowatt-hours of electricity in a month. During peak hours, the household's demand for electricity is 10 kilowatts. The load factor for this household would be:

Load factor = (1000 kilowatt-hours) / (720 hours in a month x 10 kilowatts) = 1.39

This means that the household's electricity usage is 1.39 times higher than its peak demand.

Load factor in the context of airline passenger capacity:

Suppose an airplane has a seating capacity of 200 passengers. If the airplane carries 150 passengers on a particular flight, the load factor for that flight would be:

Load factor = (150 passengers) / (200 seating capacity) = 0.75 or 75%

This means that the airplane was 75% full on that particular flight.

These examples illustrate how load factor is used to measure the efficiency of resource utilization. In the case of electricity usage, a high load factor indicates that the household is using electricity efficiently, while a low load factor indicates that the household is wasting electricity. In the case of airline passenger capacity, a high load factor indicates that the airline is using its resources efficiently, while a low load factor indicates that the airline is not filling its planes to capacity.