Ullico Inc. has announced the closing of an approximately US$75 million investment in the Neptune Regional Transmission System (NRTS), a 65-mile, 660-MW high-voltage direct-current submarine transmission cable connecting New Jersey and Long Island, New York.
Edward M. Smith, president and CEO of Ullico Inc. stated:
"This recent transaction is another example of how labor capital plays an important role in investing in energy infrastructure assets throughout this great country. At the same time, infrastructure investments are an example of one strategy that we utilize to achieve our goal of generating the returns needed to keep our union members' pensions safe and sound."
The investment includes a Firm Transmission Capacity Purchase Agreement with Long Island Power Authority (LIPA) extending through 2027, with a 20-year extension option.
Rohit Syal, head of acquisitions for Ullico's infrastructure investments commented:
"It's a great asset because of its strategic location, connecting the two important power markets of Long Island and the Mid-Atlantic Region."
Originally built by union labor, the cable has been operational since 2007. It remains an essential component of the power transmission infrastructure for the 1.1 million residents of Long Island, supplying 20 percent of their power on average.
Jeff Murphy, portfolio manager for Ullico's infrastructure business added:
"This investment supports our core strategy of owning long-term assets that provide annual income distributions to our investors. Neptune offers reliable, long-term income from a proven operating asset."
Ullico Inc., through its infrastructure business, currently has investments in the utility and energy sectors and is exploring opportunities in all core sectors including transportation and social infrastructure.
Ullico was advised by Chabourne and Parke LLP and Loop Capital Markets on the transaction. Powerbridge, LLC and Skadden, Arps, Slate, Meagher & Flom LLP advised the sellers.