It's probably easier to visualize on a graph like this one. (I'm saying the difference between Pf and Pr, at least in some cases, may be higher than the externality, which is a real-life example of what the op is talking about).
I think that, strictly, Stuart was arguing that the difference between Pm and Pf exceeds the externality cost, which may well be true. However, politically it is of course much easier to force a polluting monopoly to lower its price (to Pf) than to subsidise said monopoly still further. It is also economically more efficient (there are better things to do with public money).
You may also be right that the externality cost exceeds the difference between Pf and Pr - referring to the UK numbers, does the externality actually work out at less than about 5p per kWh? Even if it does, I'd argue that it is unrealistic to expect the price to drop to Pr and stay there indefinitely (while the suppliers go broke).
Example nicked from this online Berkeley lecture.
Monopolies are bad (morality and economics agree here).
Firms that pollute are bad (morality and economics agree here).
What about monopolies that pollute?
What about strong monopolies that pollute and receive government subsidies?
Well...
Pollution, and other negative externalities, cause firms to produce too much of their product. That's because they don't pay the full cost of the product, including the impact of pollution.
The equilibrium behaviour for monopolies is to produce too little of their product, to keep prices and profits high.
So a monopoly that pollutes is subject to two opposite tendencies: the unpriced-pollution tendency to produce too much, and the monopolistic tendency to produce too little. If the effects are of comparable magnitude, then the monopoly might be much closer to social optimum than a free market would be (the social optimum, incidentally, will generally involve some pollution: we need to accept some pollution in the production of fertiliser, for instance, in order to have enough food to stop people starving).
In fact, if the monopolistic effect is too strong, then the firm may under-produce, even taken the pollution effect into account. In that case, we can approach closer to the social optimum by... subsidising the polluting monopoly to produce more!!
And that, my friends, is why economics is not a morality tale.