The campaign, mirroring one in Hamburg which succeeded in September, intended to operate the electricity generation service with a specific focus on environmental and social concerns.
Despite being outside the city's control, the new entity would depend on the city for financial backing, and critics said it may have ended up being costly.
The concept and the referendum was a challenge to the current system being operated by energy giant Vattenfall - and to the Berlin government which only last week began legal proceedings to launch municipally-owned and run utilities.
The campaign for an independent system, controlled by the city's citizens, fell just 0.9 percent short of the 25 percent of voters needed to make it happen. Of the nearly 2.5 million Berliners eligible to vote, 29.1 percent did so, but it would have needed 21,000 more yes votes to change anything.
The issue is not off the table though. The Berlin city government - a coalition of Social Democrats and the Christian Democratic Union - interpreted the result as support for its intention to form a municipal utilities body and bid to run electricity, gas and water supplies.
Even though the independent campaigners are at odds with how this municipal utilities organ would be run, it would be a step in the right direction, they said.
But it is not even certain whether the Berlin government will really support the idea - the coalition appears split, with the conservative CDU admitting to not being much of a fan of the concept. They have persuaded their Social Democrat partners to put the enterprise under the remit of Economics Senator Cornelia Yzer, a former lobbyist for the pharmaceutical industry.
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