My state separates power “distribution” as the responsibility of the utility, from “generation” as an attempt at a competitive market. I choose my source f power by choosing what generation company I pay. Clearly, electrons are electrons, but for the power I use I pay a 50% renewables company to generate

If 90% of households have clean energy selected, and 10% prefer to pollute, the city will buy the relevant amount of clean energy.

My city gave no option. It only buys clean energy

it's "ghost" economics, if for example i live in a house that choose to pay for coal power over hydro power, my money goes to the coal power plant (or at least not to the hydro plant) if i choose to pay for hydro, that money goes to the hydro plant instead (most likely not the coal plant)

if you actually dig into power co-ops and whatever other shenanigans you find, in the US at least, you will find there are multiple layers between "the utility" and who generates the power. For example, here where i live, we have a local power utility, who buys power from a power co-op, who buys power from power plants, and possibly other power co-ops? It's really disorganized, basically the TL;DR is that it wouldnt matter even if there were separate distribution lines. It's completely irrelevant based on the complexity of the actual market anyway lol.

Suppose Provider A is 100% renewable and Provider B is 100% fossil. Both providers generate power and feed the same grid (which is managed separately from the various energy providers). The same grid powers all homes. Householders get to choose whether to buy from Provider A or Provider B. If you support renewables then you buy from Provider A; their share goes up and B's share goes down. And vice versa for B. In addition the government juggles A,B as well as C,D,E,etc to provide the overall service to the country.