Utilities and competition

I am going to stay with the 'Government should not compete against citizens' theme for a moment. State29 has a post up about the status of three municipal utility companies. The three that are bleeding the most cash.

The fact that they are losing money is not a surprise. Decisions are made based on what's good politically, not what makes sense operationally. But more importantly, why are local governments competing against other utilities? Competetors can't compete against someone who can cut utility rates and make up the difference from taxes.

Sell the utilities for cash and assumption of debt. Then the taxpayers that have been forced to support this would actually get something out of their investment. It looks like they were playing the bait and switch game, lower utility bills for higher taxes. Most likely their utility bills would increase, but their tax burden will decrease.