All the CPUC rate setting committee discussion minutes are public. You can look up what is discussed.

The regulator gets down to relatively minor capital investments like fence replacement at substations.

If the government has to approve expenditures and profit margins, there seems to be little reason for a private utility to exist?

There is very little reason for private utilities to exist in California, especially PG&E (none of them are great, but PG*E is especially bad), which keeps funding lavishly to lobby against expansion of public utility coverage areas, committing homicide, and going bankrupt only to be resurrected in an endless cycle of nonsense.

Without the private sector utility company, there wouldn't be a mechanism to raise funds from and pay profits to shareholders.

Sure there would be; raise funds: tax, pay profits: reduce tax / tax breaks. The real differentiator is in the ability to choose who your shareholders are with less scrutiny.

I tend to agree, but that's a collective decision and action problem, which we have difficulty with as a society today.