Hi Pete, long time no talk.
It's really up to the facility in question and how critical this pump is (BFW is fairly critical to me).
The SF (as its been explained to me) really goes back to the winding temperature. As you increase the load on the motor, winding temperatures increases which reduces insulation life. When the insulation fails, motor goes poof (my apologies to the electrical folks here for what I'm sure is a gross simplication). The SF and insulation class are both considerations, do you add a higher SF or a higher insulation rating? From my understanding as a process engineer, both effectively lead me the same way into a motor that can handle the higher loads.
A key question here are your ambient temperatures. I know on the North Slope in Alaska in winter, motors could be run quite a bit harder because with the colder air, windings stayed cooler. If you are in Death Valley in summer, the reverse would be true.
Back to your question and off my rambling thoughts. Most of the companies I work with for a new installation will NOT allow you to use the service factor they want to have. For a re-rate, they may allow you to use some of the service factor. How much usually generates many meetings.
Me? I'd go with the 1750 Hp. I can't say off the top of my head if that pushes you into the next starter size or bigger cables but I wouldn't want to run this service on the edge.