The gist of the paper is to demonstrate that the economical utilization of the country`s energy supply requires generating electric power wherever hydraulic or fuel energy is available, and collecting the power electrically, just as it is distributed electrically. In the first section a short review of the country`s energy supply in fuel and water power is given, and it is shown that the total potential hydraulic energy of the country is about equal to the total utilized fuel energy. In the second section it is shown that the modern synchronous station is necessary for large hydraulic powers, but the solution of the problem of the economic development of the far more numerous smaller water powers is the adoption of the induction generator. However, the simplicity of the induction generator station results from the relegation of all the functions of excitation, regulation, and control to the main synchronous station. The economic advantage of the induction generator station is that its simplicity permits elimination of most of the hydraulic development by using, instead of one large synchronous station, a number of induction generator stations and collecting their power electrically. The third section considers the characteristics of the induction generator and themore » induction-generator station, and its method of operation, and discusses the condition of ``dropping out of step of the induction generator`` and its avoidance. In the appendix the corresponding problem is pointed out with reference to fuel power, showing that many millions of kilowatts of potential power are wasted by burning fuel and thereby degrading its energy, that could be recovered by interposing simple steam turbine induction generators between the boiler and the steam heating systems, and collecting their power electrically.« less