The power factor of insulating oil equals the cosine of the phase angle between an AC voltage applied to oil and resulting current. Power factor indicates the dielectric loss of oil and, thus, its dielectric heating. The power factor test is widely used as an acceptance and preventive maintenance test for insulating oil. Oil power factor testing in the field is usually done with the Double type MH or M2H test set in conjunction with power factor tests of the oil-filled equipment. The power factor of new oil should not exceed 0.05% at 25°C. A high power factor in used oil indicates deterioration, contamination, or both with moisture, carbon, varnish, Glyptal, sodium soaps, or deterioration products. Used oil with a power factor in excess of 0.5°C should be further analyzed in a laboratory to determine the cause of the high power factor. Oil with a power factor in excess of 2.0°C may be an operational hazard. It should be investigated and either reconditioned or replaced.