Power substations are very expensive structures. Millions of dollars can be spent on just putting up one substation and hence lots of research has to be done to see if an electrical substation construction is viable or not. There are lots of factors that are usually considered before a go a head is given for the construction.
How many people will depend on the substation and their total power consumption? Although a government may want to bring power to everyone, it cannot construct substation anywhere. An electrical substation construction is usually carried out in an area that has large electric need hence cannot not rely on already present substation.
Availability of land is another factor. Although cities need lots of power, they do not have free land for substation construction. This is why you will rarely see a substation within a city. You will always find them at the outskirts of the city.