AI - Data Centers -- Energy Growth -- By State -- July 9, 2024

Locator: 48092TECH.

Tag: Oncor.

Updates

July 11, 2024: CNBC special on AI centers in the US by state -- Scott Cohn --

• top states
• Stanford has only four institutes; AI is one of the four, added in 2019; the other three: foreign policy, neuroscience, the economy; their analysis, 2024, for AI (AI, not data centers):
  
• Texas: #5; a mecca for AI jobs
• VA :#4; jobs, also
• MD: #4, law
• Washington State: #2; innovation
• CA: #1 by far, the leader of the pack

Original Post

See this post, also. And this post, also.

When you think of large data centers (LCD) in the US, think of these four regions:

• northern Virginia
• Georgia (Atlanta)
• Texas (Austin)
• Oregon (Portland / Hillsboro)

but, also, North Dakota.

Hold that thought. 

This is a most interesting tweet. Link here. 

The tweet:

But look at the EIA chart:

What's the most notable thing about that chart? Hint: look at the "legend."

And more:

The EIA link.

Back to the chart itself and the legend.

This is not a "growth in energy demand" on a percentage basis; this is the change in energy demand in raw numbers. 

Virginia is the darkest blue, followed closely by Texas. Then South Carolina.

Then it's a toss-up but it looks like #4 and #5 are North Dakota and Arizona. Then Oklahoma and Florida. 

But as noted, this is a really great chart. Look at the states with negative energy demand (yellow): New York, Pennsylvania, Illinois. Wow.

Then California. 

I was surprised Colorado, Tennessee, Missouri, New Jersey in various shades of yellow.

Back to blue: it's not just data centers, but it's also the oil industry -- Texas, Oklahoma, and North Dakota.

Spend some time on this chart; think about it. Look at some of the "less blue" states -- particularly interesting: Idaho and Nevada for the West Coast folks; and Mississippi and Georgia for the East Coast folks. I was surprised to see North Carolina so pale blue.

Related, link here:

Tag: nuclear.

Re-posting from yesterday:

******************
What If? 

It's very possible -- even likely -- that this will all end badly, but let's just suppose, let's just suppose that "everyone" is missing the biggest tech story in the last twenty years --  

• Apple
• TSM 
• Nvidia
• AVGO
  
• AMD
• AMZN
  

IYKYK.

This is not FOMO. This is not YOLO. This is IYKYK. 

The list is quite finite. 

I watch two hours of the best CNBC has to offer each day, and the prospects are "scary." In a good way.

• 0800 - 0900 hours CDT
• 1200 - 1300 hours CDT

The big "piece" I can't reconcile / conciliate: the energy requirements.

This is what I mean.

Above: six tickers.

What are/will be the six "energy" tickers that will "keep up" with the six tech tickers above.

 **************************
Largest Utilities In Texas

Link here.

Four largest utilities in Texas:

• Oncor:
• the largest in Texas
• serves more than 10 million people in Texas
• $19 billion in assets
• subsidiary of Sempra Energy
• HQ: Dallas, TX
• a subsidiary of Berkshire Hathaway Energy
• CenterPoint:
• Houston, TX
• second largest utility in Texas
• over 4 million customers
• is the only electricity provider in many parts of Texas
• AEP Texas:
• pales in comparison to #1 and #2
• more than 500,000 customers in a 100-county service area
• a subsidiary of American Electric Power (AEP)
• parts of Austin, Corpus Christi, Houston, San Antonio, TYLER
• Texas-New Mexico Power (TNMP):
• 250,000 homes and business customers
• HQ: near Lewisville, TX
• a subsidiary of PNM Resources

For comparison:

• Virginia, the dominion: Dominion Energy serves 4.5 million customers; less than half what SRE/Oncor provides in Texas.
• Dominion says electricity demand will increase by 5.5% every year for as far out as one can see; this means electricity demand in Virginia will double over 13 years
• thirteen years seems like a long time, but to data, it took a hundred years to get to present demand.
  

Duke:

• 2024: 141st largest economy in the US -- highest-ever placement in the Fortune 500 list;
• 7.2 million customers, again, less than Sempra/Oncor in Texas and a bit larger than CenterPoint, also in Texas

SRE is one of my largest holdings. I lucked into it decades ago. Never sold. Long story. I assume my cost basis is $0. I first invested in SRE (known as San Diego Gas and Electric at the time) back in 1984, or thereabouts. Long story. 

In the chart below, SRE shares were trading for $4.56.

Today, it pays $2.48 / share per year. For decades the dividends were automatically re-invested. 

Past year, one-year return; share price; p/e; dividend:

• SRE: 4%; $77; p/e 17; pays 3.22%;
• CNP: 0.6%; $30; p/e/ 21; pays 2.64%;
• Duke: 16%; $96; p/e --; pays --
• Dominion: -1.3%; $52; p/e 27; pays 5.1%; 

With a P/E of 17 and a dividend of 3.22%, and largest utility in two largest US markets (CA and TX), it seems SRE is the best of the lot.