Why correct the power factor?
The current flow through the circuit is increased by the reactive component. Normally, loads are represented by a series combination of a resistance and a purely imaginary reactance. For this explanation, it is easier to contemplate it as an equivalent parallel combination. The diagram below illustrates a partially reactive load being fed from a real system with some finite resistance in the conductors, etc. The current through the reactive component (Ireactive) dissipates no power, and neither does it register on the watt hour meter. However, the reactive current does dissipate power when flowing through other resistive components in the system, like the wires, the switches, and the lossy part of a transformer (Rline). Switches have to interrupt the total current, not just the active component. Wires have to be big enough to carry the entire current, etc. Correcting the power factor reduces the amount of oversizing necessary.
