It's probably more that they failed to expand their power generation capacity to meet demand, then tried to fix the problem by implementing a half-baked "deregu

It's probably more that they failed to expand their power generation capacity to meet demand, then tried to fix the problem by implementing a half-baked "deregulation" scheme that created a distorted market full of loopholes that allowed unscrupulous raiders (cf. Enron) to go on a looting spree and wreck the whole system, and it takes a while to pick up the pieces after a disastrous mistake. The moral of the story is that sometimes, "a competitive free market" and "a stable, regulated public utility" are both local maxima and may have very, very deep minima between them.