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Policy Analysis | November 2021

Select State Models for the Creation of New State Utility Agencies

Cody Allen and Nick Bowman

Legislation to create and fund new state utility agencies may address startup costs and projected revenues over time. Typically, in the case of state-created municipal entities or utility authorities, revenue bonds are used to provide funding for the projects undertaken by the newly developed agency or corporation. Revenue bonds allow investors to subsidize the development of a project, with principal and interest being paid back over time utilizing the project's revenues. However, revenue bonds are necessarily long-term in nature and may need to be supplemented by additional startup funds to initiate a new agency's work or projects. This CSG South Policy Analysis examines recent trends among select state and local agency startups focusing on funding frameworks.