Power is provided by a step down transformer that has 3 wires on the output, Two hot wires and the 3rd wire is the center tap on the transformer, there is no grounding involved to provide power. The ground is attached to the center tap so that the power on the street will be at the same potential as the power in the home , it has nothing to do with it working or not, it is purely for safety.
It is a simple single phase step down transformer supply.
But the center tap of the transformer is grounded to provide a 0V reference, and this is where the neutral conductor is pulled from the utility transformer (120, 0, -120V -> L1, N, L2). That's all I was trying to say...that if he has 120V power, at the very least, SOMEWHERE there is something connected to ground...in this case, back at the utility transformer...though it's not acting as a grounding conductor, and I never said it was.
Section 250.24 of the NEC requires that the neutral be grounded at the transformer or elsewhere outdoors for an outdoor transformer supplying service to premises.
(specifically 250.24(A)(2) which states "Outdoor Transformer: Where the transformer supplying the service is located outside the building, at least one additional grounding connection shall be made from the grounded service conductor to a grounding electrode, either at the transformer or elsewhere outside the building.") The grounded service conductor is the neutral. (specified in section 250.26, which requires the neutral conductor to be grounded in a single phase 3-wire system). While I know his current premises wiring is not up to code, I would find it surprising that the utility side isn't following code.
My point was if there was no 0V reference, you could have 240V circuits that worked, but without a connection somewhere on the neutral to ground, you couldn't ensure 120V circuits would stay at 120V.
In one of my original posts, I did overly simplify what I was trying to say. Without the ground, the voltage of the neutral can fluctuate, and that can be not so good.