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I'm not sure this is true. "Regulation" has to do with how the transformer's terminal voltage behaves under different loading scenarios - under heavy load, the voltage is typically dragged down some; if the transformer regulation is "good", it will not be impacted too much. Furthermore, to offset this, many transmission to distribution Transformers have load tap changers which effectively add or remove windings from the secondary side (typically), allowing manual or automatic regulation as load increases and decreases. Transmission level transformers often do not use LTC, and thus regulation is more limited (these are also usually much larger transformers). The terminal voltage could fluctuate then to +/- ~5% of nominal.

Circuit breakers, therefore, must be sized for the maximum voltage expected (what I have seen spec'd is 105% nominal), and maximum fault current expected. I don't think you can under size the circuit breaker to operate on a lower voltage simply because under heavy loading voltage might be lower than ideal.

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Q: Explain very large transformers are sometimes designed not to have optimum regulation properties in order for the associated circuit breakers to be within reasonable size?
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