If you have power factor correction capacitors, should you skip insulation power factor testing on your transformers? The answer is "no." Those PF capacitors have no bearing on the question. This is a test of the transformer insulation.

When you subject a perfect insulator to an AC voltage stress, it doesn't pass resistive current. But insulators deteriorate over time. As the insulation integrity decreases, the resistive component of the current increases — and so does the power factor.

Insulation power factor is the ratio of the resistive current component to the total leakage current under an applied voltage stress. In addition to the resistive component, there's also a capacitive component.

If you don't normally have this test done, ensure it's performed if the transformer has survived a major power event.