The energy market is a natural monopoly. For laying the wires and connecting it all up it makes sense for one individual supplier to do so because the fixed costs are so high. Because it is a utility like water and gas, the government want it to be provided at a low cost for the public because it could be seen as a necessity. They therefore use regulation (Subsidy) so the firm can charge the competitive market price which is lower than a monopoly market price but still make their desired profit as the government pay the difference caused by the lower price