By Editors of Power Engineering
Exelon Generation was ordered to pay the IRS $1.45 billion in back taxes, penalties and interest on an issue involving power plant leases in Illinois.
The massive bill is the result of an aggressive tax strategy Exelon’s predecessor company took to shield itself from taxes after the 1999 sale of the Illinois fleet of coal-fired power plants owned by Commonwealth Edison, Crain’s Chicago Business reported.
Funds from the sale were invested in long-term leases of power plants in other parts of the country. The IRS took the position the leases were intended as a tax dodge.
Exelon can appeal the ruling. A spokeswoman for Exelon said the company would not seek to recover any of the penalty from ratepayers.
The plants were ultimately sold to Edison Mission Energy, which was later acquired by NRG Energy. The majority of the plants have since been shut down.