What is the effect of increasing the power budget vs building a new power plant?

Solution 1:

The budget allows you to increase or decrease the effectiveness of your services at rip-off prices. Decreasing your budget by 50% will actually decrease the output by 75%, and increasing your budget by 50% only increases your output by 25%.

For power and water, I see no reason to increase the budget past 100%, it's simply easier and cheaper to build new buildings.

For services such as school or fire, I like to crank those up to 150% once money becomes no issue. This is because their effectiveness goes up while reducing how many of those buildings I need to cram into each area.

Solution 2:

When going "overbudget" on a Service it increases it's efficancy. For Powerplants it will be the Power Output. For Schools or Medical Services etc it will be the Range in which the building operates.

Let's stick with the Power Supply for the next part.

There are serveral things to consider when adjusting the budget. In the very beginning of the game you dont need a full budget, atleast not when you start with a coal-powerplant. It produces much more energy then needed. So you can go down on the budget to save you some money in the beginning.

When you realize that you do something very simple:

Adjust the budget as need be!

when you cant supply your town with 150% budget, get a new powerplant, and reset the budget to fit the new output/requirement level.

Thats how you get the most out of your buildings for the best money spend.

PS: I never had any fire on a service building, but it seems that it does reduce/increase the pollution depending on budget.