Most municipal bonds are bought by commerical investors who have differing credit rating needs for their portfollios. Most municipals don't have a AAA rating. As such there are sometimes market demands for AAA rated bonds that the typical municipal market can not match. Some large bond insurance companies will come in and for a fee from the issuer guarantee a set of bonds against default. In the determination of whethere to get or not get such insurance an issuer, like the state of California, needs to examine what the cost of the insurance will be over the lower interest rate savings.
My read is that the people issuing the California bonds are trying to create as large a market as humanly possible for their bonds. The companies and folks who will be most interested in the power bonds will be those that pay California income taxes. California will have variable interest rate, taxable, and guaranteed and non-guarenteed bonds. I would also expect that Calfifornia will have a variety of lenghts of the bonds, that they won't all be 20-year bonds.
What the people issuing the power bonds are trying to do is to tap into as large a market as possible so they get them all sold at reasonable costs. That is why they are not selling all vanilla, 20-year, tax-exempt non guarenteed bonds.