Is there a real disadvantage for the player kicking off step two in power grid?

Question

Maybe I am just playing the game incorrectly.

The perceived disadvantage is that you are the last player to then be able to expand and be the second player in a city.

Answer 1

There is a significant disadvantage to kicking off Step 2, which is something a player will have to do deliberately by building their sixth/seventh/eighth city (depending on the number of players). As you point out, the other players will be much more interested in saving their money to buy the (likely-cheaper) second spot in several cities instead of buying additional cities this turn (which probably have high connection costs at this point).

In most games I've played, someone kicks off Step 2 for one of four reasons:

1. They think that the extra income this turn, and having more cities sooner, is profitable enough. If you enter Step 2 with 8 cities, and everyone else has 7 or fewer, you might be able to stay ahead of your rivals in city-building. If you build to 9 or 10 cities, this is an even bigger advantage and you're more likely to be the person who builds the game-ending number of cities. And if you're the person who builds the game-ending city, you can control when the game ends, and not build that city unless it's advantageous to you. (About half of the games I've played end with the winner not powering all of his cities, just having the most powered cities and building the game-ending city.)
2. They've gotten bored with waiting. The games I play sometimes have a full turn (or even two or three!) of everyone sitting with one-less-than-the-Step-2-trigger number of cities.
3. They desperately need to build a city somewhere, and avoid being hemmed in.
4. They don't understand the full implications of going last when building cities, the turn that second slot opens up in each city.

Answer 2

As mentioned by Marshall, when other players have enough elektro to reasonably expand once Step 2 hits, the cost to the activating player in terms of net city loss, expansion planning, increased connection costs, and risk of being boxed in is very high to the player who kicks it off.

There's also a slight cost to them in terms of being forced to auction after worst card is cycled out, because the extra card you burn through opens up the futures market slightly more for your opponents. This is relatively minor compared with expansion though.