Sustainability policymaking presents numerous challenges to local governments. Municipal leaders, especially in smaller cities and towns, report that they lack the fiscal capacity and/or technical expertise to adopt many environmental protection policies. This paper investigates whether the more than 2,000 municipally-owned utilities have the potential to mitigate those problems. Data from two surveys of local governments in the United States (n=861), modeled in a pair of negative binomial regressions, finds a positive correlation between those cities with municipal power companies and those with an increased number of community-wide sustainable energy policies. Follow-up interviews with officials reveal the potential mechanisms driving sustainability by local governments that own power companies. These mechanisms are the increased capacity that publicly-owned utilities provide by virtue of income generated and access to energy-specific grants as well as the local nature of their operations, which allows a better fit of sustainable energy measures to local circumstances.