To reduce the current while keeping the power constant, the voltage can be increased. A transformer is made up of two coils, each with a different number of loops, linked by an iron core so the magnetic flux from one passes through the other. In a standard transformer, the two coils are usually wrapped around the same iron core, ensuring that the magnetic flux is the same through both coils. Power companies use step-up transformers to boost the voltage to hundreds of kV before it is transmitted down a power line, reducing the current and minimizing the power lost in transmission lines. Step-down transformers are used at the other end, to decrease the voltage to the 120 or 240 V used in household circuits.
Transformers require a varying flux to work.
They are therefore perfect for AC power, but do not work at all for DC power, which would keep the flux constant. The ease with which voltage and current can be tranformed in an AC circuit is a large part of the reason AC power, rather than DC, is distributed by the power companies. Although transformers dramatically reduce the energy lost to I 2 R heating in power line, they don't give something for nothing. In the iron core of a transformer, electrons would swirl in cross-sectional planes. This current would heat up the transformer, wasting power as heat.