Teacher Retirement System of Texas Backs Champlain Hudson Power Express Project

Posted on 02/16/2023

Teacher Retirement System of Texas is co-investing in Champlain Hudson Power Express, Inc. (CHPE). The Champlain Hudson Power Express is a proposed high-voltage direct current underwater and underground power cable project linking the Quebec area to the New York City neighborhood of Astoria, Queens. It aims to be a 339-mile fully-buried transmission line. The overall project is expected to cost around US$ 6 billion and will deliver 1,250 MW of hydropower from Quebec to New York City. The Quebec section of the line would be built and operated by TransÉnergie, the transmission arm of Hydro-Québec. However, Hydro-Quebec’s own estimates is that carbon dioxide emissions from its reservoirs are equal to several fracked-gas power plants. There are scientific studies that anthropogenic electromagnetic fields from underground cables could influence the behavior of bottom-dwelling marine species such as fish and the endangered species – the sturgeon.

The transmission line will be constructed underwater or underground from Lake Champlain, down the Hudson River to the Harlem River and into New York City. The transmission line will end in the Queens district of New York at the Astoria Converter Station, the point at which it will be connected to the city’s power grid via various connecting lines. New York’s Public Service Commission voted on April 14, 2022, to approve billions in ratepayer subsidies for the project.

Pension Money
Teacher Retirement System of Texas approved a US$ 50 million commitment to Blackstone CHPE Co-Invest, a vehicle that will co-invest in the CHPE project being developed by the Blackstone-owned Transmission Developers Inc. Blackstone Energy Partners III L.P. and Blackstone Capital Partners VIII L.P. are owners of Transmission Developers, Inc., TDI-USA Holdings LLC, and CHPE LLC.

In December 2022, the project got construction and development financing. Société Générale is one of the four coordinating lead arrangers; KfW IPEX-Bank is contributing US$ 300 million and acting as joint lead arranger for this financing. Other arrangers in the financing are Mitsubishi UFJ Financial Group, Inc. (MUFG), Mizuho Financial Group, and Canadian Imperial Bank of Commerce (CIBC). The Danish company NKT A/S is responsible for the production and splicing of all cables as well as for laying the underwater cables along the entire submarine route. Hitachi Energy USA Inc. and Kiewit Power Constructors Co. will act as general contractors for the converter station and Kiewit Power Constructors Co. for the installation of and earthworks for the underground cables. Construction work is ongoing, and all financed project elements are scheduled to be commissioned in May 2026.

On another note, Teacher Retirement System of Texas approved a £37 million commitment to Luppiter Ventures 1, an entity managed by Macquarie Asset Management.

Keywords: Blackstone Group LP.

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