Yes this is major component of what I mean by profitability. The utilities spend vast sums on grid equipment and transmission lines that they pay for over decades through bond offerings. The grid is designed to distribute electricity from centralized generation stations to distributed customers (a "mainframe" like model). They support the capital cost of this infrastructure (debt payments) and maintenance on the equipment through their per kWH rates.
An example of this is that, where I live, some depreciated hydro assets produce power at $0.0025/kWh but the electricity rate is $0.11-0.14/kWh. It is not unusual for the majority of the cost of electricity be in debt and equipment maintenance rather than generation.
If I generate electricity on my roof then the utility is screwed from both ends, they must credit me way more than it costs them to generate their own electricity, and feeding electricity into a grid not designed for it adds further wear and tear to the components. Their revenue goes down and their costs go up.
Unsurprisingly, given their sunk costs and the prospect of defaulting on huge bond obligations, they will not permit me to install a rooftop array that will generate more than 40% of my usage, even if paired with large battery systems.