Federal Financial Interventions and Subsidies in Energy Markets 1999: Energy Transformation and End Use - Table 5. Interest Rates Used for Comparisons with Federal Utility Borrowing Costs, 1990 and 1998

Table 5. Interest Rates Used for Comparisons with Federal Utility Borrowing Costs, 1990 and 1998

Rate	1990	1998
30-Year Treasury	8.61	5.58
Investor-Owned Aaa	9.45	6.77
Investor-Owned Aa	9.66	6.91
Investor-Owned A	9.87	7.04
Investor-Owned Baa	10.06	7.26
Municipal Aaa	6.97	4.92
Municipal Aa	7.07	4.99
Municipal A	7.16	5.08
Municipal Baa	7.30	5.15
Note: Municipal bond yields are significantly lower than similar maturity IOU yields because of the Federal income tax exemption for municipal bonds. Municipal bonds also usually have an exemption from State and local taxes in the jurisdictions in which they are issued. BPA's cost of funds on its appropriated and long-term debt were estimated at 78 basis points above the Treasury's own cost of funds in 1998, as explained later in this chapter. Source: Moody's Investor Service, Utility Manual 1998, and Federal Reserve, Form H-15.

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