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Most public utility companies, like Salt River Project and Arizona Public Service, generally have a few...

Most public utility companies, like Salt River Project and Arizona Public Service, generally have a few large power plants rather than many small power plants. How is this explained by Economy of Scale?

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According to economies of scale, larger units of production causes proportionate saving in the cost and using large power plants can get to produce equal units than that of similar small power plants but with the economies of scale in play a large power plant in produce more units at less cost as as the cost it uses with the increase in production which is not possible in the case of small power plants and that is the reason why public utility companies mostly used large power plants rather than many small power plants.

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