Utilities with investment-grade credit ratings sold $47 billion of corporate bonds in 2008 out of a total American bond market of $645 billion. Utilities are the third-largest debt issuers after government and finance. They need money to build power plants, pipelines and transmission lines. Utilities are also a critical component in President Obama's economic stimulus plan, which includes funding to modernize the nation's electric grid.
Utilities relied on bonds last year because commercial paper markets were largely unable to refinance short-term notes. Of course, higher financing costs for utilities could put pressure on customer rates because financing costs typicallly are a pass-through expense. (The Wall Street Journal, 1/13/09)
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