It’s hard to answer completely because it varies by municipality and I’m not an expert. But the public utility commission does regulate quite a bit, potentially ranging from where a utility can build, how much renewable sources they must have, how much they can charge, etc.

In exchange, the utility can essentially be guaranteed that competitors will not be allowed to enter the market. In the past few decades, there has been more movement towards deregulated markets but not without issues. (See the documentary “The Smartest Guys in the Room” if you aren’t already familiar with the story of Enron).