This paper discusses briefly the philosophy underlying power transformer practices on the American Gas and Electric Company system. It includes power transformers used in generating, transmission, and distribution stations. It does not include transformers generally used on distribution lines to serve residential customers, or special purpose transformers not directly associated with the transmission and distribution of power. The size and extent of the interconnected electric system on which the transformers are used are described, and the requirements of such a system discussed. Considerations entering into the selection of transformers, their general design requirements, operation, and maintenance, including principles of loading, flexibility of use, and spare transformer practices, are amplified in considerable detail. Over-all economics are emphasized. The power transformer is a most important piece of apparatus in modern electric power systems, being second only to the generator. It makes possible the widespread use of power. In larger sizes it is the largest, heaviest, and most costly piece of electric equipment, except for the generator. In total rated capacity it far outranks all other elements; hence it is worthy of the utmost attention in our search for construction and operating economies. Fortunately, the present-day power transformer is a most dependable piece of electric equipment. It has become so reliable that interruptions to service because of transformer failure are rare. Notwithstanding, however, there is great need for less costly transformers that are still more reliable and require less maintenance. These are the goals we seek.