Sometime ago I read an article (I don't remember the name or authors, sorry) that argued the problem with the old pre-deregulation vertically integrated utility

Sometime ago I read an article (I don't remember the name or authors, sorry) that argued the problem with the old pre-deregulation vertically integrated utility model wasn't that the utilities were per se inefficient, but rather a form of regulatory capture. Namely the rate of return was fixed by regulation, so the only way to get more profits was by increasing capital investments. So that was what the utilities argued for to the regulators. Combined with the various Public Utility Commissions (PUC's, the bodies that handle the regulation) were more afraid of large-scale blackouts than high prices. So the result was a lot of excess capacity, which yes, increased reliability but also costs borne by the consumers. When the industry was deregulated, yes customers got to enjoy lower prices, but that wasn't per se due to some supposed higher efficiency of private operators, but because the incentive to overinvest had disappeared and customers were reaping the rewards of previous investments. Now, however, the chicken is coming home to roost, so to speak, as demand growth, retirements of old plants etc. have caught up with the previous excess capacity, so there is again a need for a cycle of investments. That will need to be paid for in one way or another.