Ullico | Ullico Makes Major Infrastructure Investment
Ullico Bulletin

Ullico Makes Major Infrastructure Investment

Ullico Inc. recently closed an approximately $75 million investment in the Neptune Regional Transmission System (NRTS). The NRTS is a 65-mile, 660-MW high-voltage direct-current submarine transmission cable connecting New Jersey and Long Island, New York.

“This recent transaction is another example of how labor capital plays an important role in investing in energy infrastructure assets throughout this great country,” said Edward M. Smith, president and CEO of Ullico Inc. “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.

“It’s a great asset because of its strategic location, connecting the two important power markets of Long Island and the Mid-Atlantic Region,” said RohitSyal, Managing Director, Ullico Infrastructure Fund.

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.

“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,” said Jeff Murphy, Managing Director, Ullico Infrastructure Fund.

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.

Note: The Ullico Infrastructure Fund and the units issued will not be registered under the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, or under state securities laws. Investment in infrastructure is speculative, not suitable for all investors, and should be undertaken only by experienced and sophisticated investors who are willing to bear the high risks of such an investment, which include, but are not limited to, lack of liquidity, restrictions on transferring ownership to the Fund, absence of information regarding valuation and pricing, and fees and expenses. Potential investors in the Fund should carefully read the Confidential Private Placement Memorandum for a description of the potential risks associated with investment in the Fund.

Top: DC Cable Bundle, left: Sayreville, NJ Converter Station, right: Duffy Ave Long Island Converter Station

DESCRIPTION OF NEPTUNE

  • Neptune is a 500 kilovolt (“kV”) high-voltage direct current submarine electric transmission line with 660 MW capacity. It commenced commercial operations in June 2007
  • Off-taker: LIPA (Baa1/A-). LIPA is a state-owned electric provider that owns the retail electric Transmission and Distribution System on Long Island
  • Developed by PowerBridge and managed by PowerBridge under long-term management agreement
  • O&M services provided by Siemens
  • 65-mile long bundle of three separate cables: high voltage DC cable, medium voltage return cable and fiber optic cable
  • 51 miles of the cable is underwater
  • Converter stations on each end to convert AC to DC
  • Source: Neptune Regional Transmission System, LLC (Neptune RTS).

All photographs courtesy Neptune RTS.



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