Why It is Important for Investors to Create A ‘Wise Energy Use’ Stock Portfolio
Submitted by EnergyTechStocks.com
Starting today – with the story right below this one on our Home Page – EnergyTechStocks.com is rolling out a new kind of stock index not to be found on Wall Street. The time has come for a “Wise Energy Use” index — a strictly informal stock index intended to start every investor thinking about building a portfolio of companies whose fundamental business is to save their customers money by saving them energy.
“Wise Energy Use” is the new name of the game, not just in energy investing but, we suspect, in investing per se. As we emphasize in this week’s five-part Special Report highlighting 23 companies to consider, with a massive government bailout of the U.S. financial system looming, to be followed in all likelihood by a prolonged and quite possibly deep recession, businesses and consumers must find a way to cut their expenses.
Energy stands out as probably the quickest, most cost-effective way to trim a budget without inflicting long-term damage.
There’s more, however, to why “Wise Energy Use” is about to catapult to prominence, and it has a lot to do with things going on in the U.S. state of Michigan.
Last week Chrysler mounted a public relations campaign designed to convince the world that it will be a serious player in plug-in hybrid electric vehicle, or PHEV, revolution. It’s hard to take Chrysler seriously, given the enormous head start enjoyed by cross-town rival General Motors and a triumvirate of Japanese auto manufacturers – Mitsubishi Motors, Nissan and Toyota. But what it should say to investors is that the timetable for the PHEV revolution has been moved up. Initially it wasn’t supposed to arrive until 2011 or 2012. But now every car company feels it must be ready with a PHEV model by 2009 or 2010.
PHEVs have one overriding goal – to save people money by saving them energy. They are expected to achieve this wise energy use by substituting electricity for gasoline for at least the first 30 to 50 miles of driving after a car has been charged up. Instead of paying $4 for a gallon of gas, PHEV drivers are expected to pay roughly $1 for an equivalent gallon of electricity. Surveys suggest that consumers are prepared to spend billions on PHEVs provided their cost premium compared to regular cars isn’t more than about $1,000. Look for the new president, the new Congress, many state governments, electric utilities, and the car companies themselves to step in with attractive financial incentives to jumpstart PHEV sales.
As much as PHEVs will make “Wise Energy Use” the overriding concept in transportation, something called the Energy Efficiency Resource Standard (EERS) should do the same for electricity consumption in the home and office.
According to the American Council for an Energy Efficient Economy (ACEEE) in Washington, DC, Michigan just became the 18th state to adopt an EERS, which basically requires retail electricity and natural gas distributors to achieve a particular percentage of energy savings relative to forecasted energy sales. According to ACEEE, energy efficiency costs the equivalent of about three cents per kilowatt-hour, compared with anywhere from seven cents to more than 13 cents to generate power from baseload plants (plants that operate 24-7). Michigan’s public service commission reportedly has concluded that an EER will save state ratepayers over $3 billion and avoid the need to build two baseload power plants, thus adding to EERS’s attractiveness the idea of curbing greenhouse gas emissions (GHG).
No investor can afford to ignore the “Wise Energy Use” investment story
