There was and still is a tremendous economy of scale in nearly every aspect of power systems equipment. If a particular type and size of generator is efficient (i.e., produces power at an economical cost), a larger one of the same type will be still more efficient a giant, “economy size” generator. Similarly, larger, high-voltage transmission lines cost much less per unit and carry power more effectively than low-voltage lines. A large transformer costs less per unit of capacity than a small one. This qualitative rule applies to nearly all types of equipment required to move and control power, at all levels of a utility system.
Thus, Big State wants to own and operate big equipment in order to take advantage of those economies of scale to reduce its costs. This preference for size is limited by only two factors. First, Big State cannot have “too many eggs in one basket” for both reliability and business risk reasons. Second, ultimately it must deliver its product (electric power) in very small, household-size units.
The amount of power that a home or even a large office building uses is minuscule compared to the overall total handled on Big State’s system, and is tiny compared to the power produced by even a small generator, or that carried on the smallest power line.
In looking at Figure 1.1, the reader must keep in mind that only one of every type of major equipment unit is shown one each of all the essential elements in the connected “chain” of electric flow from generator to customer. The drawing shows the progression of power flow from manufacture at a generating plant (top) to consumption by a customer (bottom). Electric utility systems like Big State’s consist of a few very large units of equipment used to generate and move power in bulk quantities to cities and towns, and smaller, local equipment that divides and sub divides the power as it is distributed down streets and to individual homes.
Thus, although Big State ultimately delivers power to 1,000,000 separate locations (1 million metered houses and businesses) it owns only 8 sites where generators are operated: one for every 125,000 homes and businesses. Each plant has about four large generators (machines that actually make the power) at it one for every 37,500 sites Big State serves. It owns several hundred transmission lines and substations, but thousands of distribution feeders (it needs one for every “neighborhood” it serves), and over a hundred thousand service transformers (each serves only a handful of its customers). Finally, it maintains one million service lines (one leading to each customer) and the same number of meters to measure usage by each. Basically, the power splits and re-splits its pathway onto smaller but more numerous pieces of equipment, distributed more widely throughout the system, as it makes its way from generation to customer. In total, Big States’ investment in its system, if it had to buy all this equipment at today’s prices, is on the order of six billion dollars, or about six thousand dollars per connected meter.
