Introduction:
When generating units are loaded to equal incremental costs, it results in minimum fuel costs. This principle is known as economic dispatch, which is a method used in power system operation to determine the most economical way of generating power while meeting the load demand.

Explanation:
Economic dispatch aims to minimize the total fuel costs associated with generating electricity. It takes into account the incremental cost of generating units, which is the cost of producing one additional unit of electricity.

Equal Incremental Costs:
When generating units are loaded to equal incremental costs, it means that the cost of producing one additional unit of electricity is the same for all units. This implies that the marginal cost of generating electricity is equal across all units.

Minimum Fuel Costs:
When the generating units are loaded to equal incremental costs, it results in the minimum fuel costs. This is because the economic dispatch algorithm ensures that the units with the lowest incremental cost are dispatched first to meet the load demand. By equalizing the incremental costs, the algorithm optimizes the use of fuel resources and minimizes the total cost of generating electricity.

Optimal Loading:
Loading the generating units to equal incremental costs also ensures that the units are operated at their optimal loading. Each generating unit has a specific operating range where it operates most efficiently, and loading the units to equal incremental costs ensures that they operate within this range. Operating the units at their optimal loading reduces fuel consumption and improves overall efficiency.

Load Balancing:
Another benefit of equalizing the incremental costs is load balancing. By dispatching the units with the lowest incremental cost first, the algorithm ensures that the load demand is met with minimal deviation. This helps in maintaining system stability and reliability.

Conclusion:
In conclusion, when generating units are loaded to equal incremental costs, it results in minimum fuel costs. This approach optimizes the use of fuel resources, ensures optimal loading of units, and helps in load balancing. Economic dispatch algorithms are used by power system operators to minimize the overall cost of generating electricity while meeting the load demand efficiently.