Energy Deregulation

It's a nice concept. Break up energy companies (supply and generation) and allow for greater flux in prices and offerings to allow for more entrants into the market.

It's been going on in the US for quite a while now. Now the EU is facing problems with it too.

I do not accept that it is the best for the market. Conceptually if the government is responsible for roads, water and sewage, why should it not also be responsible, in part, for energy production? Is that not just as important?

In any industry where the upfront capital costs are so mammoth it seems that competition will be limited to those who can afford to build the power plants, which are necessarily small. Either through conglomeration of smaller entities, or the sole stakes generated by several larger entities. If we were to move towards are more decentralized system, with solar, hydrogen and small natural gas fired turbines the system might work better. Simply because it would be closer to starting an actual business. An investment of a couple hundred thousand dollars is much more manageable then several million or billion dollars. As long as we rely on mammoth, billion and multi-million dollar power plants, it seems there will never be a true market to deregulate too. A true deregulation may result in an actual monopoly developing, which would leave us pretty much with a 'unregulated' regulated market.

How feasible is this scenario: Let government take over power operations. Let private sector determine fuel costs and power demand. While the Government, based upon power demands installs new capacity. Government then taxes individuals (either as a whole or only those creating the increase in power capacity) as needed for part of the construction costs of the plant. Electricity payments would be funneled back into plants for maintenance and staff.

Thoughts?