4 Electric Power Stocks To Keep A Tab On Amid Rising Demand

The prospects of the Zacks Utility – Electric Power industry look better in 2022 as demand for utility services from the Commercial and Industrial (C&I) group is picking up on the vaccination drive and resumption of economic activities. Per the U.S. Energy Information Administration (EIA), electricity sales to residential, commercial and industrial groups have improved in 2021 from the year-ago levels. The trend will likely continue next year as well.  The National Oceanic and Atmospheric Administration’s climate prediction center forecasts below-normal temperatures along portions of the northern tier of the United States while warmer-than-average conditions are most likely across South United States and much of the country’s eastern region.  The expected less favorable winter weather in some regions can lower demand and profitability in the near term.

brown electric post under blue sky during daytime

Photo by Sigmund on Unsplash

Utilities operating in the United States are taking measures to strengthen their infrastructure. They have worked toward increasing operational resilience, lowering expenses and investing consistently to boost infrastructure and offer services more efficiently. NextEra Energy (NEE - Free Report) , with large renewable operations and well-chalked out capital investment to strengthen infrastructure,  offers an excellent opportunity to stay invested in the utility space. Other utilities that are worth holding in your portfolio include Duke Energy Corporation (DUK - Free Report) , Dominion Energy (D - Free Report) and Alliant Energy (LNT - Free Report) .

About The Industry

The Utility – Electric Power industry involves the process of generation, transmission, distribution, storage and sale of electricity to residential, commercial and industrial customers.  A substantial portion of utilities’ earnings is generated from regulated operations. Unless there is any major weather variation or unprecedented incidents, such as the coronavirus pandemic, demand for the services provided by utilities remains more or less steady, regardless of economic cycles. A clear transition is evident in this industry with more companies declaring zero-emission goals on their own. Research and development over the years have resulted in a substantial decline in the cost of setting up utility-scale power projects based on renewable energy sources. This is helping utilities to replace coal from their generation portfolio.

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