These Utilities are Cleaning up their Acts

The push for cleaner energy is driving utilities to change the way they look at generating power, here are four companies for the environmentalist in you.

Mar 10, 2014 at 12:54PM

Carbon dioxide and global warming are big buzzwords today, and they're enough to drive a utility CEO to distraction. However, that doesn't mean that companies aren't doing the right things. Xcel Energy (NYSE:XEL), Great Plains Energy (NYSE:GXP), NextEra Energy (NYSE:NEE), and Northeast Utilities System (NYSE:ES), for example, are all worth an environmentalist's review.

Wind in their sails
Xcel Energy has regulated utility operations in eight Midwestern and Western states. It serves 3.4 million electricity customers and 1.9 million gas customers. On the environmental front, it has a goal of reducing its carbon dioxide emissions by 30% between 2005 and 2020. That's on top of notable reductions in other pollutants like nitrogen oxide, sulfur dioxide, and mercury. A big part of this plan is fueled by wind generation.


In 2005, wind provided a scant 3% of the company's power. By 2012, that number had increased to 12%, with a goal of 22% by 2022. That increase is coming mostly at the expense of coal fired power, which is set to fall from 56% of the pie in 2005 to 43% by 2022. Of course, Xcel's wind focus has much to do with the location of its operations, which are in the wind rich mid-west.

That's the same region that Great Plains Energy is in, but it's at a different stage of development. Smaller than Xcel, Great Plains serves around 830,000 customers in Missouri and Kansas. As of 2012, coal represented over 80% of the company's energy output. Wind power supplied just 1%. Although it's been working on installing scrubbers to reduce emissions from its coal plants, it also plans to increase the amount of renewable power in its portfolio.

The company intends to increase the amount of wind and hydro power it uses to around 10% of its overall output. That should happen between now and 2022, when regional requirements require such shifts. That said, any money Great Plains invests in renewable assets is likely to receive a favorable regulatory review.

A sunny state
NextEra Energy is the holding company for Florida Power & Light, which counts 4.6 million Floridian's as customers and counting, since Florida's population has been ticking higher. That's all well and good, but NextEra also earns a gold star from an environmental standpoint. The company claims to have, " of the cleanest emissions profiles among the nation's top 50 power producers."


Part of that has to do with the fact that natural gas makes up about 60% of its power, with nuclear adding another 20%. However, wind, hydro, and solar lend a hand, combining to contribute around 17%. Wind is the renewable power source of choice at NextEra. It has over 10,000 megawatts of wind power, "...enough to power a city the size of Chicago..." Although solar is just a small part of the mix today, being in the Sunshine State has its benefits: NextEra has, "...a total of nearly 1,100 MW of U.S. contracted solar projects..." planned. It clearly isn't done "cleaning up" its pollution profile.

Canadian waters
Another company to watch is Northeast Utilities, which serves 3.6 million electric and natural gas customers in three New England states. The company notes that, "The region's renewable and carbon mandates are not achievable under the current market framework." That's why it's building transmission lines to connect hydro power in Canada to the northeast markets it serves, among other projects.

The combination of transmission assets and renewable power will put Northeast Utilities in a solid position when it asks for rate hikes. Both tend to be viewed positively by regulators.

A cleaner future
This quartet are all working toward a cleaner energy future. Xcel and NextEra are furthest along today, making them solid choices from an environmental perspective. Northeast Utilities and Great Plains, however, appear to have solid building prospects that bode well for both rate increases and cleaner operations in the years ahead. All four are worth a look for the environmentally conscious.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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