Water is a critical asset for our entire economy, and it is an increasingly stressed resource. In the past year we've seen rivers drop because of extreme drought, followed immediately by flooding from heavy rains. The climate is "weirding," particularly in certain regions, and we can no longer count on abundant, clean water in some areas. Sooner or later, regulators will have to deal with this. Are companies ready?
First Energy (NYSE:FE) may not be. Record drought and extreme heat in the Midwest in 2012 forced the company to slow production at its Perry nuclear plant -- water is necessary to cool nuclear plants, and water levels were at historic lows because of the drought. First Energy isn't alone. Two reactors at Dominion Resources' (NYSE:D) Millstone Power Station in Connecticut were forced to shut down last August, when the temperatures in Long Island Sound were too hot to cool the facility. Exelon's (NYSE:EXC) Braidwood Generating Station, a nuclear plant near Chicago, received permission from the Nuclear Regulatory Commission last July to operate after temperatures in its cooling pond increased above the plant's 100-degree permit.
One company is working hard to get out in front of its water risk. Ford (NYSE:F) has recently begun a stakeholder consultation process through which it tests possible water scarcity scenarios and works to find solutions. The automaker has a water stewardship strategy that has reduced its water use much more quickly than expected. Ford is now more than halfway toward its 2015 global target of using an average of 4 cubic meters of water per vehicle. Watch our video to hear why this is a smart move for the company.
Sara Murphy has no position in any stocks mentioned. Follow her on Twitter: @SMurphSmiles. The Motley Fool recommends Dominion Resources, Exelon, and Ford and owns shares of Ford and General Electric. Try any of our Foolish newsletter services free for 30 days. 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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