Municipal utility (municipally-owned electric system)

A utility that is owned and operated by a city. In most cases, municipal utility rates are set at the city level, either by the municipal administration or by a local utility board or commission. In some limited circumstances, state-level regulation applies. Municipal utilities often have access to low-cost power from federal hydroelectric projects and can obtain low interest loans, and they are exempt from income and other taxes at the federal and state levels. These factors contribute to lower financing costs for plant and equipment. Municipal utilities serve roughly 14 percent of the nation's electric customers.