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Yahoo
21 hours ago
- Business
- Yahoo
Time to Buy the Vanguard Utilities Index Fund ETF to Take Advantage of a Growing Trend?
The United States demand for energy grew modestly for many years. Energy demand in the U.S. market is set to increase dramatically. The Vanguard Utilities Index ETF is a diversified way to exploit an important transition. 10 stocks we like better than NextEra Energy › When a blackout happens, modern life comes to a standstill. Almost everything stops because so many things rely on electricity today. For years utilities were looked at as sleepy investments, which they were. But the world is about to take a giant leap forward, leaning into electricity like never before. Now is the time to buy the Vanguard Utilities Index Fund ETF (NYSEMKT: VPU), to take advantage of the decades of growth opportunity ahead. NextEra Energy (NYSE: NEE) is one of the largest utilities in the United States, with a market cap of more than $140 billion. What's interesting about the business is that it operates in both the regulated utility space and the clean energy sector, where it is one of the largest producers of solar and wind power on the planet. It has a bird's-eye view of electricity demand. NextEra Energy is very clear about what it sees happening. Between 2000 and 2020, electricity demand grew 9%. That's not 9% per year, that's a grand total of 9% over the entire 20-year time period. That's the baseline that investors have gotten used to, and that's why utilities are viewed as sleepy income stocks. NextEra Energy expects electricity demand to grow by 55% between 2020 and 2040. That's a steep change, and a significant one at that. This assessment is backed by the National Electrical Manufacturers Association (NEMA), which expects electricity use to increase from 21% of final energy use to 32% by 2050. If you haven't looked at utility stocks before, you might want to now so you can take advantage of this growing demand trend. You could buy individual utility stocks to take advantage of this investment opportunity. NextEra Energy, for example, appears well situated, since NEMA is projecting notable growth for renewable energy. But NextEra's utility stronghold is in Florida, and NEMA believes the biggest growth drivers will be different in different regions. In other words, the better way to take advantage of the big-picture trend is with a utility ETF that provides broader exposure. The Vanguard Utilities Index Fund ETF tracks the MSCI US Investable Market Utilities 25/50 Index. Although it's a bit complex, this index basically attempts to track a diversified portfolio of large-, mid-, and small-cap U.S. utilities. Electric utilities account for roughly 85% of the index. The portfolio contains 68 stocks, and the expense ratio is a modest 0.09%. Although you might make out better picking one great utility, that's a harder task than it may seem. NextEra Energy is a good example, because it is well run and has grown faster than most of its peers. But it also tends to trade at a premium to other utility stocks. Southern Company (NYSE: SO) is another interesting example from the ETF's holdings. It spent years in the Wall Street doghouse while it was building two nuclear reactors. Once the project, which was late and over budget, was complete, the stock price rallied. Then there's Dominion Energy (NYSE: D), yet another ETF holding, which is currently out of favor because it's in the middle of a business turnaround. Only Dominion operates in one of the largest data center markets in the world. With so many different stories and investment timelines, punting with a diversified ETF like the Vanguard Utilities Index Fund ETF is an easy solution. What's nice about the Vanguard Utilities Index Fund ETF is that it lets you take advantage of the growth potential ahead for a sector that's expected to see materially increased demand. It does so while providing diversification and income, given its nearly 3% dividend yield. For reference, that's more than twice the yield you would collect from the S&P 500 index (SNPINDEX: ^GSPC). Overall, growth and income investors will both find the Vanguard Utilities Index Fund ETF an attractive way to play a massive change in U.S. electricity demand. Before you buy stock in NextEra Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and NextEra Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $882,344!* Now, it's worth noting Stock Advisor's total average return is 996% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Reuben Gregg Brewer has positions in Dominion Energy and Southern Company. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy. Time to Buy the Vanguard Utilities Index Fund ETF to Take Advantage of a Growing Trend? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-04-2025
- Business
- Yahoo
New nuclear power plants don't make sense for South Carolina
Nuclear reactor assemblies pictured Sept. 12, 2024, in storage at V.C. Summer nuclear site near Fairfield. (Provided by S.C. Nuclear Advisory Council) Gov. Henry McMaster called for a 'nuclear power renaissance' in his recent State of the State address. Our governor urged lawmakers to support a revival of our state's failed nuclear plant. That's a mistake given the inconvenient facts surrounding our state's recent history with the V.C. Summer nuclear debacle. I researched the future prospects for new nuclear power projects in the United States. While small modular reactors, or SMRs, have long-term potential for U.S. nuclear power, SMR's are still on the drawing board. There currently are no new nuclear plants under construction in the U.S. The Deloitte Research Center for Energy & Industrials did an analysis as to whether new nuclear power plants could meet the projected need for future energy generation. The extensive analysis presumed robust deployment for the design, manufacture and projected costs of new nuclear power over the next decade. Even then, nuclear power could only meet 10% of the projected increase just for new data center demand by 2035. The National Electrical Manufacturers Association has projected that data center growth coupled with transportation electrification will drive a 50% increase in U.S. electricity demand through 2050. The industry points to the reliability of nuclear power along with its lower emissions. But what about the construction delays and the resulting cost overruns? And what about the creation of more radioactive waste? High-level radioactive waste is currently being stored on site, but that waste will remain radioactive for thousands of years. The U.S. doesn't have a long-term repository for high-level radioactive waste. Let's look at Georgia's recent experience with their Vogtle nuclear power plant. Vogtle was approved in 2009. Yet the project wasn't completed until 2024, seven years behind schedule. To make matters worse, Vogtle's projected costs ballooned from its initial estimate of $14 billion to roughly $35 billion. As a result, Georgia's ratepayers have seen six rate increases since 2023. Do we want rapid increases in our electric bills in South Carolina? When it comes to building new nuclear power plants, the real problem comes down to excessive costs. Nuclear construction costs range from $6,417 per kilowatt to $12,681 per kW. Compare that to $1,290 per kW for new gas-fired plants. This vast difference in construction costs will result in much higher electric bills. S.C. ratepayers would be on the hook for all nuclear construction costs. But it doesn't end there. Add the costs of nuclear fuel, ongoing maintenance, and the storage of the nuclear waste, and the costs are astronomical. S.C. ratepayers are already paying for the failed V.C. Summer nuclear plant after it was abandoned in 2017. That failed nuclear project ultimately bankrupted SCE&G and Westinghouse. Several utility executives were convicted and served prison or home detention sentences for their role in covering up those cost overruns. Remember too that those same utility executives hid the independent Bechtel report from the Public Service Commission and the public. Why? So they could continue to get their millions in cash bonuses by covering up their crimes. If not for a mid-level whistleblower, this cover up would have cost our residents, small businesses and large industries even more damage. Santee Cooper, our state-owned utility, is soliciting proposals to see if others might be interested in buying the partially built nuclear reactors. It seems inconceivable that any entity would want to invest in that failed project, though many companies have shown initial interest. Formal proposals are due May 5. The experts interviewed by Utility Dive wouldn't hazard a guess about how much it would cost to complete V.C. Summer Units 2 and 3. Santee Cooper and Dominion Energy have already made it clear that they have no interest in trying to revive V.C. Summer, even though they still own the site. When all is said and done, neither should South Carolina. We would be foolish to risk repeating those same mistakes again. The bottom line: New nuclear power plants are not a viable option. There's too much risk. Our state's future power generation needs are best met with a mix of existing nuclear plants, existing gas plants, new solar coupled with battery storage, hydro dams and pump storage. Currently, solar panels with storage are the lowest cost option for our state's electricity generation. During an earnings call Wednesday, NextEra Energy CEO John Ketchum said the U.S. must remain realistic and pragmatic about its energy policies. 'We need to be practical about when technologies will be available at scale and how much they'll cost when they show up — all of which factors into how much Americans pay on their electric bill each month,' he said. Low-cost renewables and battery storage should be used as a 'critical bridge,' he said. 'We cannot isolate ourselves to just a couple of technologies, like gas and nuclear, which are much more expensive than they've ever been and take far longer to build.' Small modular nuclear reactors are 'still 10 years away at scale in the best of scenarios,' he added. South Carolina should think twice about building more nuclear power plants. Nuclear power plants are just too expensive to build. And the small modular nuclear reactors are a decade away from being a viable alternative.
Yahoo
08-02-2025
- Business
- Yahoo
Opinion - Trump wants to deregulate. Progressives should help him.
President Trump has made deregulation a priority and charged Elon Musk's Department of Government Efficiency with suggesting ways to cut red tape. Some progressives are cautiously supportive of deregulation. More should be. From Jimmy Carter to Sen. Ted Kennedy (D-Mass.), progressives once saw the wisdom of cutting red tape — especially if that tape tied the hands of consumers and would-be competitors in order to privilege industry insiders. After the election, Sen. John Fetterman's (D-Pa.) former chief of staff, Adam Jentleson, encouraged Democrats to embrace 'supply-side progressivism,' calling for 'limited deregulation that advances liberal policy goals.' He pointed to successful Democratic candidates like Marie Gluesenkamp Perez (D-Wash.) and Jared Golden (D-Maine), both of whom have raised the alarm about overregulation. Vice President Kamala Harris recognized that the regulatory state sometimes hurts those whom it is supposed to help. In campaign proposals to address the housing crisis, she vowed to 'take down barriers and cut red tape, including at the state and local levels.' Cautious Democratic support for deregulation may surprise those who think only of the Sen. Elizabeth Warren (D-Mass.) approach. Warren once claimed that 'deregulation' was 'just a code word for 'let the rich guys do whatever they want.'' In reality, regulations often help the rich guys at the expense of consumers and fair competition. New Deal regulations, for example, forced prices up in more than 500 industries, causing consumers to pay more for necessities like food and clothing when a quarter of the workforce was unemployed. Economists have documented similar price-raising regulations in agricultural, finance and urban transportation. In other cases, regulations require customers to buy certain products such as health insurance. Licensing rules protect incumbent service providers in hundreds of occupations despite little evidence that they protect consumers from harm. More subtly, regulations can protect industry insiders by limiting the quantity of available services. State certificate-of-need laws in health care, for example, limit dozens of medical services in two-thirds of states, raising prices, throttling access, and undermining the quality of care. That's one reason why Rhode Island's Democratic governor wants to reform his state's certificate-of-need laws. If you don't believe that regulations protect big businesses instead of their customers, take a closer look at how firms lobby. In 2012, the National Electrical Manufacturers Association lobbied to maintain a ban on incandescent light bulbs. Why? Because it raised the costs of smaller, rival firms that specialized in making the cheaper bulbs. Local car dealerships lobby to preserve state restrictions on direct car sales, which limit potential competitors that sell online. In international comparisons, researchers find that heavier regulatory burdens depress productivity growth and contribute to income inequality. In the U.S., the accumulation of regulations between 1980 and 2012 is estimated to have reduced income per person by about $13,000. Since low-income households tend to spend a greater share of their incomes on highly regulated products, they bear the heaviest burden. Progressives can help break the symbiotic relationship between special interests and overregulation. Indeed, they've often been the first to identify the problem. Writing a century ago in his book 'The New Freedom,' President Woodrow Wilson warned that 'regulatory capture' would grow as government itself grew: 'If the government is to tell big businessmen how to run their business, then don't you see that big businessmen have to get closer to the government even than they are now? Don't you see that they must capture the government, in order not to be restrained too much by it?' The capture Wilson warned of took root. By the early 1970s, progressive consumer advocates Mark Green and Ralph Nader were noting that 'regulated industries are often in clear control of the regulatory process.' The problem was so acute that President Jimmy Carter tapped economist Alfred Kahn to do something about it. In his research, Kahn meticulously showed that when 'a [regulatory] commission is responsible for the performance of an industry, it is under never completely escapable pressure to protect the health of the companies it regulates.' As head of the Civil Aeronautics Board, Kahn moved to dismantle regulations that sustained anti-consumer airline cartels. Then he helped abolish the board altogether. Liberals like Nader and the late Sen. Ted Kennedy (D-Mass.) supported the move. Kennedy's top committee lawyer, future Supreme Court Justice Stephen Breyer, later noted that the only ones opposed to deregulation were regulators and industry executives. Their reform efforts unleashed competitive forces in aviation that had previously been impossible, opening up airline routes, lowering fares and increasing options for consumers. It's an embarrassing truth for both Democrats and Republicans that none of Carter's successors, including Ronald Reagan, have pushed back as much as he did against the regulatory state. Trump faces an uphill battle. He'll stand a better chance if progressives acknowledge once again that lower-income Americans stand to gain from deregulation. Matthew Mitchell is a senior fellow at the Fraser Institute, a senior research fellow at the Knee Regulatory Research Center at West Virginia University, and a senior affiliated scholar at the Mercatus Center at George Mason University. Adam Thierer is a resident senior fellow in Technology and Innovation at the R Street Institute. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
08-02-2025
- Business
- The Hill
Trump wants to deregulate. Progressives should help him.
President Trump has made deregulation a priority and charged Elon Musk's Department of Government Efficiency with suggesting ways to cut red tape. Some progressives are cautiously supportive of deregulation. More should be. From Jimmy Carter to Sen. Ted Kennedy (D-Mass.), progressives once saw the wisdom of cutting red tape — especially if that tape tied the hands of consumers and would-be competitors in order to privilege industry insiders. After the election, Sen. John Fetterman's (D-Pa.) former chief of staff, Adam Jentleson, encouraged Democrats to embrace 'supply-side progressivism,' calling for 'limited deregulation that advances liberal policy goals.' He pointed to successful Democratic candidates like Marie Gluesenkamp Perez (D-Wash.) and Jared Golden (D-Maine), both of whom have raised the alarm about overregulation. Vice President Kamala Harris recognized that the regulatory state sometimes hurts those whom it is supposed to help. In campaign proposals to address the housing crisis, she vowed to 'take down barriers and cut red tape, including at the state and local levels.' Cautious Democratic support for deregulation may surprise those who think only of the Sen. Elizabeth Warren (D-Mass.) approach. Warren once claimed that 'deregulation' was 'just a code word for 'let the rich guys do whatever they want.'' In reality, regulations often help the rich guys at the expense of consumers and fair competition. New Deal regulations, for example, forced prices up in more than 500 industries, causing consumers to pay more for necessities like food and clothing when a quarter of the workforce was unemployed. Economists have documented similar price-raising regulations in agricultural, finance and urban transportation. In other cases, regulations require customers to buy certain products such as health insurance. Licensing rules protect incumbent service providers in hundreds of occupations despite little evidence that they protect consumers from harm. More subtly, regulations can protect industry insiders by limiting the quantity of available services. State certificate-of-need laws in health care, for example, limit dozens of medical services in two-thirds of states, raising prices, throttling access, and undermining the quality of care. That's one reason why Rhode Island's Democratic governor wants to reform his state's certificate-of-need laws. If you don't believe that regulations protect big businesses instead of their customers, take a closer look at how firms lobby. In 2012, the National Electrical Manufacturers Association lobbied to maintain a ban on incandescent light bulbs. Why? Because it raised the costs of smaller, rival firms that specialized in making the cheaper bulbs. Local car dealerships lobby to preserve state restrictions on direct car sales, which limit potential competitors that sell online. In international comparisons, researchers find that heavier regulatory burdens depress productivity growth and contribute to income inequality. In the U.S., the accumulation of regulations between 1980 and 2012 is estimated to have reduced income per person by about $13,000. Since low-income households tend to spend a greater share of their incomes on highly regulated products, they bear the heaviest burden. Progressives can help break the symbiotic relationship between special interests and overregulation. Indeed, they've often been the first to identify the problem. Writing a century ago in his book ' The New Freedom,' President Woodrow Wilson warned that 'regulatory capture' would grow as government itself grew: 'If the government is to tell big businessmen how to run their business, then don't you see that big businessmen have to get closer to the government even than they are now? Don't you see that they must capture the government, in order not to be restrained too much by it?' The capture Wilson warned of took root. By the early 1970s, progressive consumer advocates Mark Green and Ralph Nader were noting that 'regulated industries are often in clear control of the regulatory process.' The problem was so acute that President Jimmy Carter tapped economist Alfred Kahn to do something about it. In his research, Kahn meticulously showed that when 'a [regulatory] commission is responsible for the performance of an industry, it is under never completely escapable pressure to protect the health of the companies it regulates.' As head of the Civil Aeronautics Board, Kahn moved to dismantle regulations that sustained anti-consumer airline cartels. Then he helped abolish the board altogether. Liberals like Nader and the late Sen. Ted Kennedy (D-Mass.) supported the move. Kennedy's top committee lawyer, future Supreme Court Justice Stephen Breyer, later noted that the only ones opposed to deregulation were regulators and industry executives. Their reform efforts unleashed competitive forces in aviation that had previously been impossible, opening up airline routes, lowering fares and increasing options for consumers. It's an embarrassing truth for both Democrats and Republicans that none of Carter's successors, including Ronald Reagan, have pushed back as much as he did against the regulatory state. Trump faces an uphill battle. He'll stand a better chance if progressives acknowledge once again that lower-income Americans stand to gain from deregulation. Matthew Mitchell is a senior fellow at the Fraser Institute, a senior research fellow at the Knee Regulatory Research Center at West Virginia University, and a senior affiliated scholar at the Mercatus Center at George Mason University. Adam Thierer is a resident senior fellow in Technology and Innovation at the R Street Institute.
Zawya
27-01-2025
- Business
- Zawya
Trump's high-wire act to transform US power grid won't be easy
President Donald Trump's oversight of an increasingly unreliable U.S. power grid requires swift action, he said this week, but there is no easy fix for one of the grid's most complex and troubled areas: long-distance transmission lines. Trump's National Energy Emergency declaration and executive orders detail a long list of interconnected problems dogging an electric grid vulnerable to fuel shortages, soaring demand, and an increasing number of wild weather events. "There's clearly a recognition of the need to increase energy production broadly in the United States and do it with whatever resources necessary," said Spencer Pederson, a top executive at the National Electrical Manufacturers Association. Trump's initial moves could help to some degree: The emergency declaration directs agencies to scour their books for laws and regulations that could be used to speed approval and permitting for projects like transmission, and overcome regulatory obstacles that have long hampered big projects. The executive orders, part of a slew of actions Trump signed his first day in office to accelerate broader energy production, seek to streamline permitting procedures that historically have taken years or even decades. Morgan Stanley, in a note this week to investors, said Trump's actions "could improve the speed of transmission infrastructure permitting and environmental reviews." Big obstacles remain. Pederson noted a shortage of large electrical transformers and skilled workers, and added that the U.S. grid's overseas supply chain is still adjusting to being reoriented away from China, a move that began during the first Trump administration. Also, some doubt that Trump's executive actions can penetrate an entrenched web of local, state and regional regulators who have strong political incentives to hold down spending for electric customers, said Kent Chandler, a former chairman of Kentucky's Public Service Commission who teaches a class on public utility regulation at Yale Law School. Power lines spanning multiple states have been repeatedly blocked due to broad local resistance to what some view as unsightly or environmentally worrisome infrastructure projects. Shon Hiatt, Director of USC Marshall's Business of Energy Transition initiative, said Trump's emergency declaration could prove useful for speeding up transmission projects on public lands, but that overcoming local and state actors could require an Act of Congress. "It's not like there's public lands going across the entire country where this needs to happen," Hiatt said. DATACENTER BOOM The grid's vulnerability has intensified since Trump's first term, with booming power demand from datacenters for artificial intelligence and cryptocurrency along with manufacturing and EV adoption, utility executives, regulators and trade groups say. The grid's capacity of long-distance transmission lines would need to quintuple over the next decade to handle that big surge in power demand outlined in the U.S. Energy Department's latest state of the grid report. "The clear message from (Trump) is that it's time to really put a heavier foot on the gas pedal and get things moving," said Larry Gasteiger, executive director of WIRES, a trade association for transmission line companies. Making that happen would be good news not just for fossil fuel-fired power, but also for hundreds of renewable energy projects - like solar and wind farms - that have struggled for access to the grid. Christina Hayes, executive director of Americans for a Clean Energy Grid, said one of the most promising parts of Trump's executive order, titled Unleashing American Energy, is a directive to develop recommendations for Congress for interstate energy infrastructure. She said that "could potentially lead to meaningful reforms in siting and permitting procedures." "Western states are likely to see the most immediate impact from these changes, given the concentration of federal lands in the region," Hayes said. Catie Hausman, a University of Michigan economics professor, has studied how some public utilities have blocked transmission buildout for renewables to protect the economic viability of their incumbent gas and coal power plants. She does not expect Trump's executive actions to make those turf battles disappear. "There have been so many impediments to building long-distance transmission lines," Hausman said. "It's hard to even know where to start." (Reporting By Tim McLaughlin and Laila Kearney; Editing by David Gregorio)
