KEY ISSUE
PROTECTING PUBLIC POWER FINANCING TOOLS
Demand for energy is surging across America, driven by AI data centers, advanced manufacturing centers, and the electrification of our economy. These industries aren’t just consuming more electricity, they are powering economic growth, creating jobs, and strengthening America’s global competitiveness.
To keep electricity affordable and reliable, Congress must protect critical financing tools that enable infrastructure investment—like tax-exempt municipal bonds and elective pay tax credits, which drive innovation across nuclear, hydrogen, storage, carbon capture, solar, and wind projects. Eliminating these financing tools will raise costs, delay projects, and impose a hidden tax on American families.
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TAX POLICY PRIORITIES
#1
Maintain Tax-Exempt Municipal Bonds
Tax-exempt municipal bonds help state and local governments fund essential infrastructure projects — roads, fire & police stations, schools, libraries, public hospitals, and utility infrastructure. Eliminating the tax exemption would drive up borrowing costs by $823 billion, hitting American households with an extra $6,500 in taxes and higher rates.
#2
Preserve Elective Pay
Tax Credits
Public power utilities collectively serve 55 million Americans and rely on energy tax credits to fund critical energy projects. Without these credits, public power communities will face a $34 billion shortfall over the next decade — driving up costs for families and businesses, making new infrastructure unaffordable, and stalling the growth of key industries like AI and manufacturing.
#3
Update Treasury’s Rostenkowski &
Private Use Rules
Outdated financial regulations—the Rostenkowski and private use rules—prevent public power utilities from buying and financing attractive generation assets for sale by private investors to meet rapidly growing load or entering into long-term energy contracts with customers to ensure they pay their fair share of infrastructure costs. These restrictive policies drive up costs, hinder energy innovation, and risk pushing major businesses and jobs overseas.
WHY IT MATTERS
MEETING AMERICA’S ENERGY NEEDS
Demand for Energy is Surging
50%
more energy will be needed by 2035 to support AI data centers, advanced manufacturing, and electrification in the U.S.
58 GW
is the generation LPPC members expect to add over the next ten years to meet growing load and replace aging infrastructure
Public Power is Investing in Energy Infrastructure to Meet Demand
$69B
is the amount LPPC members plan to invest in energy infrastructure over the next five years, including:
3,500 mw
onshore wind
2,800 MW
offshore wind
11,250 mw
solar
3,500 mw
storage
550 mw
carbon capture
2,000 MW
pumped hydro
Smart Financing Tools Make Infrastructure Investment Possible
Tax-exempt municipal bonds and elective pay tax credits help fund energy projects, which keeps electricity affordable and reliable, creates jobs, and boosts the U.S. economy.
TAX CREDITS
Energy tax credits will unlock $34 billion for LPPC members’ planned investments over the next decade.
INFRASTRUCTURE FUNDING
These credits will help these not-for-profit utilities build critical energy infrastructure while reducing the financial burden on American families and businesses.
Over the last decade, more than $4 trillion in tax-exempt municipal bonds have been issued, funding 90% of all public-sector construction.
Energy tax credits spurred nearly $5.50 in private investment for every $1 claimed, driving $220 billion into innovative and emerging technologies like battery storage and hydrogen in just one year.
THE HIDDEN COST OF INACTION
If Congress Fails to Protect Financing Tools, it Will Cost American Families
MUNICIPAL BONDS
$823B
in increased borrowing costs by eliminating tax-exempt municipal bonds
$6,500
hidden tax on every American household and business
ENERGY TAX CREDITS
$34B
increase in price of LPPC member infrastructure projects over the next decade by cutting energy tax credits
14%
rise in electricity costs for American families by cutting energy tax credits
Permitting Reform
Reforming federal and state licensing and permitting empowers public power to meet America’s growing energy needs by building critical energy infrastructure projects faster.
Current permitting and licensing requirements create delays in project timelines, which drives up project costs and slows our ability to meet surging energy demand. Streamlining federal and state licensing will help public power build critical projects like transmission infrastructure, low-carbon generation, pipelines, and storage. And since public power utilities are not-for-profit organizations, savings are passed directly to American consumers.
To accelerate energy infrastructure development, policymakers must:
- Reform the federal permitting process. Clear coordination between federal agencies, state regulators, and the courts is key to speeding up energy project approvals.
- Advance sensible transmission planning to expand the grid while keeping costs fair for consumers. As community-owned utilities, public power systems should have a voice in the process, and new projects must show clear benefits, with costs fairly allocated and overseen by FERC to prevent excessive charges.
- Implement faster licensing for nuclear, hydro, and pipeline projects. Reforms at the Nuclear Regulatory Commission and in Congress are needed to reduce delays, lower costs, and ensure these proven clean and reliable energy sources can help meet America’s growing electricity demand.
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Environmental Regulations
Practical environmental rules help public power deliver reliable, affordable, and clean electricity.
With demand for electricity surging, the U.S. is struggling to build infrastructure fast enough. While well-intended, the timelines within EPA’s Power Plant CO₂ Rule make compliance impractical given the rule’s reliance on nascent technology and current supply chain challenges, risking higher costs for consumers and strained electricity supply during a period of rising demand.
To safeguard energy reliability and affordability, LPPC priorities for the EPA’s Power Plant CO₂ Rule include:
- Permit the most efficient plants without unnecessarily raising costs
- Address supply chain constraints that could drive up costs and delay infrastructure development
- Prevent premature coal plant retirements that threaten grid reliability and America's near-term power supply
Additionally, LPPC urges federal agencies to:
- Ensure policies offer flexible compliance that acknowledges and allows for regional resource differences
- Rely on NERC-led technical studies to safeguard grid reliability
- Support the deployment of innovative energy technologies
Many LPPC member utilities are leaders in investing in zero- and low-carbon resources and offer some of the cleanest generation portfolios in the industry. Smart policies must balance clean energy goals with the reality of rising demand.
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Energy Infrastructure Financing
Affordable financing enables public power to build the energy infrastructure our communities need.
Building and maintaining critical energy infrastructure starts with affordable financing. Public power utilities rely on tax-exempt bonds and credits to fund critical projects that power American homes, businesses, and growing industries.
To ensure public power utilities can develop affordable energy infrastructure, policymakers must:
- Maintain access to tax-exempt financing
- Preserve elective pay tax credits
- Restore tax-exempt advance refundings
- Provide sequestration protection for Build America Bonds
- Update Treasury’s private use rules for tax-exempt bonds
These policies lower costs for not-for-profit, community-owned public power utilities investing in and building new energy infrastructure. These are proven policies that will help keep electricity costs low for American families and businesses.
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