The Hoover Dam was one of the best examples of public and private money collaborating in our country’s history.
But there’s a lot of confusion about how the dam really came to be.
That popular story goes something like this: The Hoover Dam was an FDR-New Deal project designed to put Americans to work during the Great Depression.
But that’s not true. Not even a little bit.
President Herbert Hoover came up with the idea. He wanted to use the Colorado River to provide water and electricity to Southern California and the Imperial Valley.
When it was done, the Hoover Dam was the biggest and tallest dam on the planet.
It’s 726 feet tall from its foundation to the road. And it stretches 1,244 feet across the Black Canyon of the Colorado River.
The Hoover Dam is a huge concrete arch-gravity dam. It’s no longer the largest or the tallest dam in the world.
But the 6-million-ton concrete construct is still enormous. That’s enough concrete to build a 4-foot-wide sidewalk around the planet.
Nomi visits the Hoover Dam
And here’s a fact that blows my mind…
Every single state in the country contributed some part of the supplies and materials needed to complete the build. Talk about a national effort.
Construction for the dam spanned five years. This created jobs for as many as 5,218 people who worked during the peak of its building activity.
Today, the Hoover Dam provides an abundance of cheap electricity for California and the Southwest.
If not for the dam, Los Angeles, San Diego, Phoenix, Denver, and Salt Lake would not be anywhere near the size they are now.
Today, the seven states of the Colorado River Basin have 45 million more people than they did in 1930.
That population growth happened thanks to the water and electricity that the Hoover Dam provided.
Because without energy, economic growth is impossible.
One of the Most Lucrative Electric Plants Ever Built
One goal of the Hoover Dam project was to protect surrounding cities and farms from water damage. After all, the Colorado River is prone to floods.
But there was a larger goal, too…
To harness the river southeast of Las Vegas to generate enough cheap electricity to power homes and industries throughout the region.
How? That’s where Lake Mead comes in.
Lake Mead, the country’s largest reservoir, is located behind the dam. It can hold more than 9 trillion gallons of water from the Colorado River.
And it provides water to farmland, industries, and millions of people in Nevada, Arizona, California, and as far south as Mexico.
But the Hoover Dam didn’t just create a massive reservoir of water in the middle of the desert. It created one of the most lucrative electricity generation plants ever built.
That’s because the dam generates enough power to enable the economies of its surrounding cities and states to thrive.
The water from Lake Mead drives the massive turbines at the dam that generate electricity for the surrounding states mentioned above.
There are 17 hydroelectric turbines that make up the Hoover Powerplant, located at the base of the dam.
These turbines generate roughly 4.2 billion kilowatt hours (kWh) of electricity per year. That makes it one of the largest hydroelectric plants in the United States.
Each generator can power up to 100,000 American homes. And the hydroelectric plant produces enough electricity to serve about 1.3 million people across Arizona, California, and Nevada.
Hydropower, or hydroelectric power, is one of the oldest and most plentiful sources of renewable energy around. It accounts for 31.5% of the total renewable electricity in the U.S. and about 6.3% of all U.S. electricity.
Plus, its profit margins are impressive.
The plant sells its electricity on the wholesale market for 1.6 cents per kilowatt hour. In comparison, Las Vegas residents pay about 11.6 cents per kWh for electricity.
That means consumers pay seven times the price the powerplant sells its electricity for.
But even at that low cost, the Hoover Dam generates and sells about $63 million in electricity every year. Remember, it cost $49 million, in 1930s dollars, to build it.
What’s more, the dam will keep generating this revenue for decades.
What This Means for Your Money Today
Now, I can’t take you back in time to invest in one of the private companies that built the Hoover Dam.
But I can tell you this…
We are standing at the cusp of a power initiative that will thrust our economy into a robust future. Just like the Hoover Dam’s powerplant lifted the economies of the western U.S. states.
I’m talking about the nuclear energy revival – which is set to go into overdrive, thanks to legislation coming out of Washington.
I got a recent glimpse of that on Capitol Hill, where I had dozens of meetings with Congressional leaders and staff in the energy space.
When I was there, 17 energy bills sailed through markup in a single meeting. Ten of them were nuclear energy-related bills.
That kind of volume and speed is not normal in Washington!
A staffer contact of mine from Delaware later confirmed this was the most bills with the quickest process he’d ever seen.
But these bills aren’t fully baked into the cake yet. They’re due to start getting funding early this year.
That means we’re about to see a lot more policies directed at supporting nuclear energy and technology and domestic uranium and nuclear fuel supplies.
And if you’re a regular reader, you know that it pays to follow Washington’s money trail.
A simple way you can position yourself to take advantage is through the Global X Uranium ETF (URA). It’s a fund that provides access to companies involved in uranium mining and nuclear technologies.
It holds 46 companies, including Cameco, the Sprott Physical Uranium Trust Fund, and NexGen Energy. And it’s a great place to start your search.
Regards,
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Nomi Prins
Editor, Inside Wall Street with Nomi Prins