NEPTUNE TRANSMISSION SYSTEM, FINANCED BY ENERGY INVESTORS FUNDS AND STARWOOD ENERGY GROUP, BEGINS DELIVERING POWER TO LONG ISLAND
NEW YORK, NY (July 2, 2007) Energy Investors Funds (“EIF”), on behalf of United States Power Fund, L.P. and United States Power Fund II, L.P., and Starwood Energy Investors LLC, an affiliate of Starwood Energy Group Global LLC, both established private equity fund managers, announced today that after extensive testing, the Neptune Regional Transmission System (“Neptune RTS”), a 65-mile, 660 megawatt undersea/underground electric transmission link between Long Island and Sayreville, New Jersey, has begun delivering much-needed power to homes and businesses on Long Island.
EIF and Starwood Energy are the principal equity investors in Neptune RTS, the developer, owner and operator of the Neptune project. The firms began funding the development of Neptune RTS in June 2004 and closed their permanent equity investments in July 2005.
“We are extremely pleased with the completion of the Neptune RTS project, well ahead of schedule and in time to meet summer peak demand,” said Andrew Schroeder, Senior Partner with EIF. “After working with the talented Neptune team through the challenges of development and construction, it is gratifying to see Neptune RTS energized to meet demand growth and to supply low cost power to Long Island Power Authority customers in an environmentally responsible manner,” continued Schroeder. Mr. Schroeder also observed that “the recent power failure in the New York market highlights the enormous need for better generation and transmission infrastructure in constrained markets across North America.”
At a total project cost exceeding $600 million, Neptune RTS is an undersea and underground High Voltage Direct Current (HVDC) system that includes a cable running from Sayreville, New Jersey to New Cassel in the Town of North Hempstead in Nassau County. It provides the Long Island Power Authority (LIPA) with enough electrical capacity to meet the electricity demands of more than 600,000 average-sized homes. Through the Neptune cable, LIPA and its 1.1 million customers have access to the PJM energy grid over which approximately 165,000 MW of generating capacity is dispatched. The Neptune cable provides Long Island with secure, long-term access to one of the most diverse and competitively priced wholesale electricity markets in the United States. PJM coordinates the movement of wholesale electricity in 13 States and the District of Columbia. The project was under development for five years and construction lasted two years.
“The Neptune project is a veritable Interstate Highway for electricity,” said Barry Sternlicht, the Founder and Chairman of Starwood Energy Group, noting that “Starwood Energy is proud to have partnered with EIF and the Neptune development team on this critical energy infrastructure project and is eager to advance the similar Hudson and Green Line transmission projects.” Mr. Sternlicht further commented that “these projects will provide congestion relief and access to more efficient, environmentally-sensitive power sources, including renewables, for New York City and New England.”
Neptune has a 20-year Firm Transmission Capacity Purchase Agreement contract with LIPA, which was awarded via a competitive RFP in June 2004.
About Energy Investors Funds
Energy Investors Funds was founded in 1987 as the first private equity fund manager dedicated exclusively to the independent power and electric utility industry. Its consistent, proven investment strategy is to create geographically and technologically diversified portfolios of electric power-related assets that provide superior risk-adjusted equity returns with current cash flow and capital appreciation. EIF is a market leader in funding the development and construction of independent merchant transmission projects such as Neptune RTS. As investment managers Energy Investors Funds seeks to mitigate commodity risk (fuel and electricity) by focusing primarily on acquiring power assets with long-term off-take contracts. Energy Investors Funds has mobilized over $3.3 billion in capital, and currently manages six private equity funds from its offices in Boston, New York, and San Francisco. These funds have made over 90 diversified investments with a combined underlying asset value exceeding $5 billion. For more information, visit www.eif.com.
About Starwood Energy Group
Starwood Energy Group is the energy investment affiliate of Starwood Capital Group, a leading private investment firm that specializes in the ownership and development of real estate and real estate-related businesses on behalf of both institutional and high net worth family investors. Since 1991, Starwood Capital affiliates have invested approximately $6 billion of investor capital in transactions representing over $30 billion of asset value. In the last three years, Starwood Energy Group has completed transactions representing over $1 billion in total enterprise value, with an emphasis on the ownership and development of critical energy infrastructure assets in both transmission and generation. An affiliate of Starwood Energy Group owns 250 MW of gas-fired “peaker” power plants in California that comply with California’s rigid emissions standards and is currently developing an additional 120 MW of peaking capacity for a major California utility. For more information, visit www.starwoodenergygroup.com.
About Neptune RTS
Neptune Regional Transmission System, LLC of Fairfield Connecticut, is the developer, owner and operator of the Neptune project, responsible for its planning, permitting, financing and construction. EIF Neptune, LLC and Starwood Energy Investors are the principal equity investors in Neptune RTS. Neptune principals are also currently developing additional undersea and underground transmission systems in the Northeast, utilizing similar technology and encouraging private investment in critical transmission infrastructure to serve densely populated areas in a cost-effective and environmentally sound manner. For more information, visit www.neptunerts.com.