WOODBURY - The IRS has approved a critical state contract that allows LIPA to keep its tax-exempt status. The ruling will allow PSEG Long Island to take control of LIPA overnight on Dec. 31.

In July, the state struck a deal with PSEG that allows the private organization to fully manage LIPA's operations. Gov. Andrew Cuomo says LIPA will function as a financial holding company.

The PSEG deal was contingent on a favorable IRS ruling.

LIPA is expected to have about 50 employees after the transition - about 30 more than Cuomo originally expected.

Cuomo says he's hopeful that number will decrease after the transition of power takes place.