Practically before the lights were back on, there were those blaming the blackout on deregulation run amok. No such thing is at work. Rather, the problem is too little deregulation of the part of the electricity infrastructure that failed: transmission. Deregulation of the electricity market over the past two decades has mostly focused on electricity production, which has grown significantly. Transmission has remained heavily regulated, and, unsurprisingly to those with an appreciation of the free market, has seen less growth. The demand for electricity grew 30% in the last decade, while transmission capacity grew only 15%, according to the Economic Policy Research Institute. The trend is expected to continue. The federal Energy Department projects that over the next decade transmission investment will grow only 6% as electricity demand grows 20%. If America is to avoid more blackouts like Thursday’s, there will have to be further deregulation of the wires.

“We are caught at midstream in a Goldilocks, half-hot, half-cold situation between full regulation of service monopolies and a fully deregulated wholesale power market that would benefit consumers,” a Federal Energy Regulatory Commission spokesman, Bryan Lee, told The New York Sun.

Investors are reluctant to invest in transmission line upgrades because of regulatory uncertainty, according to Mr. Lee. “An investor does not know if we are going to go ahead and continue deregulation or going to roll back some of the deregulation,” he said. They are also hesitant because the rate of re turn that FERC allows transmission owners to earn on investments in transmission systems is low when compared to the risks of completing a project, according to the director of energy industry analysis at the consulting company UtiliPoint, Ken Silverstein. This pushes capital elsewhere in the economy, Mr. Silverstein argues. Furthermore, Mr. Lee points out, electricity generators have little interest in investing in transmission. Transmission constraints — artificial shortages — make generation more valuable.

To handle the requirements that the transmission system expects over the next 10 years, about 27,000 gigawatt miles will need to be added to the grid, according to the Edison Electric Institute. However, only 6,000 gigawatt miles are planned. A solution will require allowing those who invest in transmission lines to recoup more on their investments. It will also require government authorities that need to approve the building of transmission lines to shed their not-in-my-backyard mindset. It will further require maintaining and expanding our local power generating facilities.

As a partner in the Digital Power Group, Mark Mills, makes clear elsewhere on this page, New York can ill afford to close a power plant such as Indian Point. Well before the decade is out, he writes, New York will need at least 3,000 megawatts of new electric supply — the output of one-and-a-half new Indian Points. There’s no reason to make that two-and-a-half more plants. There’s certainly a lesson to be taken from the blackout. Bu it’s not that we’ve been deregulating too much but rather too little.