Washington DC-based Ullico, a labour-owned insurance and investment company, has invested approximately $75 million in the Neptune Regional Transmission System, a 65-mile, 660-megawatt (MW) high-voltage direct-current submarine cable connecting New Jersey and Long Island, New York, the company said in a statement.
Operational since 2007, the Neptune transmission system supplies 20 percent of the area’s 1.1 million residents’ power on average. Its 660MW of capacity are fully contracted to the Long Island Power Authority (LIPA) under a 20-year power purchase agreement which expires in 2027. However, the agreement includes a 20-year extension option.
“This recent transaction is another example of how labour capital plays an important role in investing in energy infrastructure assets throughout this great country,” Ullico’s president and chief executive Edward Smith said. “At the same time, infrastructure investments are an example of one strategy that we utilise to achieve our goal of generating the returns needed to keep our union members’ pensions safe and sound,” he added.
The transaction marks Ullico’s fourth investment in infrastructure. Ullico first invested in the asset class in December 2012, participating as majority equity owner of Rialto Water Services, which is jointly owned by an affiliate of Ullico and Table Rock Capital. RWS was awarded a 30-year concession by the City of Rialto in California for the upgrade of the city’s water and wastewater services.
A second investment followed in June last year when Ullico acquired a minority stake in an operating wind farm in the US.
In November 2013, the company announced the creation of a partnership with Panasonic Eco Solutions North America and Coronal Management to finance new or operating solar energy projects. The first project to be financed through the partnership was a 16.2MW portfolio of California Renewable Energy Small Tariff (CREST) projects, for which Ullico committed $50 million. Ullico Infrastructure Fund serves as the majority asset owner.
Originally established as a life insurance company in 1927, Ullico currently comprises five companies: The Union Labor Life Insurance Company; Ullico Casualty Company; Ullico Casualty Group; Ullico Investment Advisors; and Ullico Investment Company.
In 2012, the company established the Ullico Infrastructure Fund, which seeks investment opportunities in the construction, maintenance, refurbishment and operation of US infrastructure. While its current investments are in the utility and energy sectors, the company is also exploring opportunities in all core sectors including transportation and social infrastructure, according to the statement.