Apparent power calculation of different loads for transformer sizing
Method one gives the correct KVA if you sum the lagging VARs as positive and the leading VARs as negative. Method two will always overstate the KVA except in the unlikely event that all of the loads have the same power factor. It may be useful to overstate the KVA if you want to be sure you have some safety factor in the transformer loading. Also, If the loads are under the supervision of separate people it will be easier to enforce a KVA limit for each one rather than state both VAR and watt limits for each.