By applying intelligent analysis of resulting market power to the spate of proposed airline mergers, the government can make sure that healthy competition remains so that the new supplies are used optimally. The electricity problems are more difficult. At base, they require a mixture of less consumption and more production. Short of government fiat, markets are the best way to accomplish both goals - let the price rise and people will use less while suppliers will produce more. Unfortunately, it is also a messy way.
Prices can gyrate wildly as both consumers and producers game the market.
It is especially difficult to encourage competition in a situation where retail distribution is so constrained. Only one set of wires brings power to homes and factories. Intelligent government incentives are required, and California has shown how to do it stupidly. By setting up a situation where prices were frozen at the retail level but allowed to float at wholesale, the risks and rewards of deregulation were placed entirely on the shoulders of the electric companies. If prices fall, they reap a windfall profit.