After hinting at serious steps during his inauguration, President Obama announced his last climate change policy initiatives last week. What it lacks in detail, it makes up for in opinion. With some energy sources in and others out, utility dividend stocks could see some major mix-ups. For savvy investors, there’s an underwhelming small dividend stock swinger that could be setting itself up for home runs in the near future. Here’s what you need to know.
Power Plant Pollution 101
Putting politics aside, there are a few basic facts you and I need to know about electricity. Like it or not, electricity production accounted for 33% of all greenhouse gas emission in 2011, putting it at the forefront of any pollution debate. Forget gas guzzlers and factory fumes: Electricity even beat out transportation’s 28% and industry’s 20%. More to the point, power plants in and of themselves are responsible for around 40% of all greenhouse gas pollution .
But as the president points out, all electricity production is not created equal. Throughout the 21-page document, the White House picks a series of energy source winners and losers. And for one dividend stock, its energy eggs are in all the right baskets.
NextEra Energy, Inc. (NYSE:NEE) is the nation’s largest producer of renewable energy. Of its 18,122 MW of generating capacity spread across 24 states and four Canadian provinces, the utility owns just over 10,000 MW of wind capacity and is the largest owner of wind and utility-scale solar energy projects in North America.
NextEra Energy, Inc. (NYSE:NEE) has benefited tremendously from wind production tax credits and solar subsidies in the past, and many dividend stock investors are wondering whether NextEra Energy, Inc. (NYSE:NEE)’s luck is about to run out. But it seems that wind can still fill NextEra Energy, Inc. (NYSE:NEE)’s sails. A recent Congressional approval pushed wind power projections up 34% in the next three years, and the president seems more than happy to agree with Congress on this one.
As testimony to tax credits, the White House pats itself on the back for the doubling of wind production since 2009 and promises to do more. The president has set a goal of doubling renewable energy by 2020 and will work with the Department of Energy to accelerate clean energy permitting.