Utilities are one of the cases where market dynamics break down. It's very obvious why, when you realize how difficult it is build even a relatively simple electrical transmission system, or a power plant. The barriers to entry are extremely high.

Furthermore, switching from one provider to another is inherently difficult. There is only one set of pipes leading to your house, how you going to switch to an alternative? Who is going to build the line for the 1 new customer?

And finally, splitting the business across the vertical doesn't work either. Generation of power is tied to grid management, this is tied to transmission maintenance and expansion.

All things considered. Monopoly emerges naturally and rent seeking is pretty much given. There are only two options left. Either the utility is operated by government for common good, or it the monopolist is so heavily regulated and controlled by the government, that it is, in effect, its extension.