AGDC Gains Favorable IRS Tax Exemption Status

In a recent ruling, the U.S. Internal Revenue Service determined AGDC qualifies as a tax-exempt political subdivision of the State of Alaska under new and more stringent proposed IRS regulations.

As a political subdivision, AGDC will not be subject to federal income tax and can issue tax-exempt debt. The federal tax exemption can further reduce the cost of service on the system and can increase the competitiveness of the project while also improving overall returns to project stakeholders.

AGDC was not dependent on this ruling to make Alaska LNG economically viable; however, the ruling creates the opportunity, under the right conditions, for lower cost debt financing and makes the project even more competitive.