Reducing costs and emissions, and improving efficiency in the electric power networks are becoming urgent. It is, therefore, necessary to apply improvements in the industry’s operation. A case in point is the current efforts to maintain acceptable consumer’s operational PF (PFopr) gauged against reference PF (PFref), where the penalties are levied on monthly averaged PFopr below PFref. The efforts can be enhanced if based on interactive involvement and participation between consumers and services providers (SP’s), mainly by the fair implementation of penalties and incentives. Enticing consumer participation enables mutual benefits. The current treatment of PF in Saudi Arabia is based on average monthly measurements of consumers’ PFopr over an extended period. In this spirit, a novel mathematical model and framework are presented which consist of a time-referenced function relating applicable tariff to PFopr, thus benefiting the SPs by reducing the capital and maintenance costs, providing flexibility to focus on the peak load periods, and rewarding incentives to the consumers maintaining PF in an acceptable range. The model was implemented on energy measurements at four industrial facilities for one year and the results were verified in terms of reduction in losses, and the resulting monetary benefits, and reduction in CO2 emissions.