ALBANY — State Power Authority CEO Richard Kessel, a longtime operative for Democrats and Republicans, resigned his $240,000-a-year post under pressure yesterday after coming under investigation by the inspector general.

A source close to Gov. Cuomo said Kessel would have been fired had he not resigned.

Kessel is being probed for the possible improper distribution of more than $1 million in grants from the NYPA and the Long Island Power Authority, which he once headed, to politically connected groups on Long Island.

“It is clear that Kessel was using ratepayer funds to ingratiate himself with some powerful friends,” said a source close to the probe being conducted by Inspector General Ellen Biben.

A spokesman for Biben, John Milgrim, would only say, “The investigation of Richie Kessel is ongoing.”

Kessel said he would leave his post after Labor Day.

He once served as a political organizer and Consumer Protection Board chief for Govs. Mario Cuomo and George Pataki.