IRS OK's LIPA-PSEG Power-Switch

Posted Friday, December 27th 2013 @ 11am  by David North

Washington, D.C. - (WALK) Long Islanders got some electrifying news from Washington: the Long Island Power Authority will keep its federal tax-exempt status, permitting New Jersey-based PSEG to take over Long Island's power grid as scheduled, overnight on December 31.

Approval from the IRS was necessary for a privatized operation to qualify for federal storm reimbursments and for tax-exempt financing to upgrade Long Island's power infrastructure.  Without approval, the deal would have been financially unworkable, according to company officials.

LIPA will reduce staff, and function as a financial holding company; owning its transmission and distribution system, while PSEG Long Island will manage utility operations.

Photo: Jc3s5h