Both state-owned (municipal) and privately-owned energy companies have to face enormous challenges due to the German energy transition as well as the ongoing liberalization of the energy markets in Europe. Especially the energy production sector needs to find new strategic solutions to tackle these challenges. Although, the issues of both kinds of energy companies are similar, privately and state-owned companies are subject to a different regulatory framework. This leads to partly significant legal and de facto advantage and disadvantages for municipal energy companies. These differences are mainly based on constitutional requirements which constrain the legislator in his ability to shape the regulatory framework for the municipal economy. Municipality Codes, however, do not always comply with the constitutional guidelines, in particular with regard to the common good and interregional business activities. Therefore, the Municipality Codes need to be adjusted. The challenge is to consider the needs of the municipal companies which are facing the troubling waters of energy transition while concurrently complying with the constitutional requirements.