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Governor Cuomo Announces IRS Approval for PSEG Long Island to Operate New Long Island Utility

LongIsland.com

Favorable IRS ruling paves the way for enhanced operating services agreement with increased ability to make necessary improvements while retaining tax exempt status/

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Albany, NY - December 26, 2013 - Governor Andrew M. Cuomo today announced that the Internal Revenue Service has approved the State’s contract with PSEG Long Island to operate a new Long Island utility while retaining its tax-exempt status. This decision was the final regulatory approval needed before the revised contract could take effect. Click here for the ruling letter from the IRS.

The enhanced contract, reached in July following adoption of the LIPA Reform Act, gives PSEG Long Island increased accountability and decision-making ability in managing LIPA’s transmission and distribution system that serves 1.1 million customers on Long Island and the Rockaway Peninsula.

“Today’s formal approval of the PSEG-LI contract from the IRS is a win-win for Long Island ratepayers,” said Governor Cuomo. “Long Islanders will finally benefit from a privatized utility operation with improved disaster response and customer service, that maintains tax-exempt benefits such as financing infrastructure upgrades and preserving eligibility for federal reimbursement related to major storms. This IRS ruling means better service and cost savings for ratepayers, and is a victory for the residents and businesses of Long Island.”

“The IRS decision is certainly good news as we prepare to assume responsibility for the LIPA system in just five days,” said David M. Daly, president and COO of PSEG Long Island. “Our new contract provides us with greater authority over day-to-day operations, including budgeting, maintenance, storm preparedness and response, infrastructure improvements, and energy efficiency and renewable activities. We have made a strong commitment to bring PSEG’s reputation for excellence to Long Island, and provide customers with a level of service they expect and deserve from their electric utility.”

The revised contract also paves the way for the new company to be branded with the familiar orange sunburst that has been part of the PSEG brand for more than 40 years in New Jersey, Connecticut and Bethlehem, NY.

PSEG Long Island will begin placing its brand on utility vehicles, customer bills, signage at company work locations, and employee uniforms on January 1st. All company employees – from meter readers to managers – will wear identification badges that sport the new logo.

PSEG Long Island LLC was selected by LIPA in Dec. 2011 to manage LIPA’s electric system. The 12-year contract includes commitments to improve customer satisfaction and provide safe, reliable service for LIPA customers.