And, just as naturally, the government actually owns a lot of the distribution network. The producers provide into the distribution network, the customers receive from the distribution network, and the government regulates fair (by some definition thereof) access.
So how come there are countries without a natural monopoly and with competing utility providers?
Also running your own generator with oil isn't a few orders of magnitude (i.e. at least 100x) more expensive. I wouldn't be surprised if it's not even one order of magnitude more expensive, but maybe just twice as expensive.
I also don't think GP's simile is good, but some of your arguments against it are just blatantly false.
Local governments own most U.S. utility lines and pipes, so a competing for-profit utility would have to go against the not-for-profit public service, leaving low to no room for profit and no reason to even compete.
Fiber/cable/dsl lines are one of the few U.S. utilities with competition because the performance/reliability/features of the service can vary greatly and because almost no local governments ran their own ISP before private companies came in and ran their lines. I can bet that any area with a municipal ISP has a very low chance of seeing xfinity/att run their own fiber if they're not already servicing the area.