public power bond

Public Power Bond

A bond issued by a publicly-owned utility company. Because utility companies have very large capital expenditures (they must build expensive infrastructure to provide their services), they use public power bonds to finance many of their projects. Because they are publicly-owned, interest is usually tax exempt at the federal level.

public power bond

Debt that is issued by a public power agency such as the Municipal Electric Authority of Georgia. Interest on such a bond is usually tax-exempt federally. Interest and principal payments are derived from revenues generated by the sale of electricity.