Dominion contends that the technology doesn't exist to run a reliable line of the caliber and kind needed under 4 miles of riverbed - at least not without a price tag in the billions.

Curtis said the Skiffes over-the-river plan, at $60 million, is indeed on the lower cost end of the dozens of routes and options the company considered. Whatever the expense, though, customers will reimburse Dominion. Rate hikes are automatically allowed for utilities that build infrastructure to strengthen the grid.

"So these are rate-payer dollars, not Dominion dollars," Curtis said. "But the opposition is still committed to the conspiracy theory."

"What's frustrating is that people think we're being disingenuous," Curtis said. "They don't believe we've looked at all the alternatives, or they think we're only concerned about making the most money for our shareholders."

Several lines already feed outside power to the Peninsula, but it won't be enough without the Yorktown plant, which Dominion says is too costly to upgrade in the face of new federal clean-air standards.

Strenuous efforts to mitigate rather than innovate seem likely to increase vulnerabilities by generating public and customer backlash, motivating market competitors, and instigating potential legal challenges.

This story has significant implications for electric utilities facing increasing and especially disruptive competition that may shift their risk position from the zone in which regulation is effective to one in which it is not. That Market Street responded to disruptive competition by simply requesting rate increases from its regulator reveals denial that their economic woes were due to fundamentally changed circumstances that required new organizational strategy, not just regulatory intervention. Market Street, while fully understanding the existence of threats to its viability, showed no real signs of innovation or adaptation in this regard, but rather continued a reliance on conventional cost-accounting-based utility ratemaking practices to the bitter end.

In the end, the electric utility as an institutional form has not exhausted its relevance. Claims that utilities are in a certain death spiral seem premature. However, those predictions seem disturbingly grounded in tacit assumptions that utilities are too hidebound by their past to be able to adapt in a timely or agile way to rapidly changing conditions. If so, utilities will find themselves to be brittle rather than resilient when confronting disruptive competition in a sector that is central to social, economic, security, and environmental necessities and, therefore, cannot remain static. All signs point to the reality that utilities must change. The open question is whether they will change by embracing and, indeed, leading value creation or be changed by others in the market who embrace it first and more firmly.