While I believe that the death of the urban regulated utility is in sight, I can also see a pathway to salvaging their value.
What are the areas that Regulated Electric Utilities can do to survive the growth of the unregulated customer-centric utility competition:
Utilities must reverse-engineer their economic model to be customer-centric vs their current model to deploy more capital (there is a customer elasticity in paying, and they have been blind to it)
Utilities should partner or acquire unregulated offerings that are customer-centric, and allow them to run as customer-centric businesses, and not be overridden or concerned by effects on regulated business
Use the regulated model to effectively bring online new customers and de-risk certain asset investments, but seek to move proven assets, including customers to the unregulated side of the house (there are ways you can protect rate payers while doing this)
The net effect is to reduce the operational expenditures of the regulated grid so that the grid can be a truly ubiquitous distributor for block chain, energy and back up power.
Accept the final destination of a ubiquitous distributor as a low-cost option provider. (Regain your efficiencies to deliver at a lower cost)
Reduce your line losses rather than bloat cost to rate payers
Convince your municipal shareholders to learn to live without large dividend policies until the organization is re-structured properly
Regain a Trusted Advisor status with customers
Regulated Utilities have been embarking on the creation of unregulated businesses, but always had that caveat that it cannot affect their own business.
If an Urban Utility does this right, it would grow their unregulated model and assets and lead them to having a larger enterprise value in total package, despite the reduction in value in regulated assets. They would be on their way towards the transition to low-carbon economy, better resiliency and customer-centric model.