Electric power may flow through several substations between generating plant and consumer, and may be changed in voltage in several steps.

A substation that has a step-up transformer increases the voltage while decreasing the current, while a step-down transformer decreases the voltage while increasing the current for domestic and commercial distribution. The word substation comes from the days before the distribution system became a grid.

The first substations were connected to only one power station where the generator was housed, and were subsidiaries of that power station.