The investment will help fund and bring the project to fruition, and leverage ITC Holdings' experience, expertise and resources in the electric transmission industry. ITC Holdings is the parent of International Transmission Company, a leading independent transmission company based in Michigan. KKR and Trimaran Capital Partners are the principal equity investors in ITC Holdings.
With the creation of independent transmission companies, transmission super-highways like Empire Connection can now move forward to rebuild this country's power grid. The recent blackout in the Northeast and Midwest, affecting 50 million electric customers in New York, Ohio, Michigan and Canada, is evidence such projects are critical and long overdue.
"ITC Holdings brings vital management resources to the project, while KKR and Trimaran provide the financial sponsorship to give us the wherewithal to complete Empire Connection," said Steve Mitnick, CEO of Conjunction.
"This opportunity to participate in the Empire Connection project is exactly what we're about," said Joseph Welch, CEO of ITC Holdings. "It reflects our focus on investments in infrastructure and engineering solutions that result in greater efficiency in the flow of electricity, better system reliability and lower overall energy costs."
The approximate US$700 million Empire Connection project is comprised of two circuits along railroad and highway rights-of-way some 130 miles from upstate New York to New York City. Conjunction is already considering a possible third circuit of 1150 MW to further bridge the transmission bottlenecks in New York State.
Conjunction estimates Empire Connection will save New York City and Westchester County residents and businesses more than $600 million per year in electric costs starting in 2006, when the project comes online. Empire Connection makes the power supply for downstate more secure and provides environmental benefits, including a reduction in power plant emissions. Riverkeeper and Natural Resources Defense Council have recently endorsed the project.
Federal Energy Regulatory Commission approval is needed as a condition to closing of the investment by ITC Holdings. Conjunction will soon submit its application to the New York Public Service Commission to obtain approval necessary for construction of the Empire Connection project.