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How Biden’s climate plan can modify where U.S. power comes from

Yahoo Finance's Rick Newman and Alexis Christoforous to discuss upgrading the power grid across the country.

Video transcript

ALEXIS CHRISTOFOROUS: President Biden's massive $2 trillion infrastructure plan would rank as one of the largest federal efforts ever to curb the country's planet warming emissions. But as senior columnist Rick Newman writes, it can also impact where your power comes from. Rick joins us now. And why don't you break this one down for us, Rick, how is this going to impact, I guess, our electrical providers?

RICK NEWMAN: Yeah, we have an electrical grid that was built with power plants close to the people they serve. So your power, for the most part, is generated relatively close to where you live. Turns out, this is somewhat inefficient, especially if we really ramp up solar, solar farms and wind farms and things like that. Right now, there are limits on the ability to move energy from the eastern part of the United States to the western or the western to the eastern part.

And the reason that's a problem is because the best place to get solar energy is in the Southwest. And the best place to get wind energy is from the Great Plains. And you cannot move them to the other part of the country really at all for the most part. So if we're really going to do what Biden wants to do and take these dramatic steps to get down to a zero emission power sector by 2035, you're going to have to move that clean power where it's needed.

And this changes during whatever-- it changes based on the season. It changes on the time of day. So you really need to be able to move power all around the country. And in order to do this, we got a lot of building to do. I mean, we have to build high voltage transmission lines that will go from the west to the east and vise versa. And I think one of the things that really starts to dawn on you as you look into the details of this is how complex and how massive this really is.

So if Biden starts to get some of the spending that Congress is putting into legislation, we're talking about a major revamp, the biggest revamp of the US electrical grid probably in its entire history.

ALEXIS CHRISTOFOROUS: And who might actually benefit from that? I mean, in terms of a business standpoint, Rick, or if you're thinking as an investor here, where might those opportunities lie?

RICK NEWMAN: Well, the good news is this would probably have a significantly positive return. In other words, if you invested a billion dollars, you might save well over a billion dollars. In fact, one study, one important study on this found the benefit to cost ratio would be 3 to 1. So that for every dollar you invested, you would save $3. Because, basically, you'd be moving cheaper power where it's needed. And you would eliminate the need for some of the most expensive and also some of the dirtiest power.

So that means consumers bills will not go up. So if you do this right, emphasis on do it right, you can get a much cleaner power sector. This obviously would be good news for the workers who are building it and for the construction firms that are building it. But it does not necessarily mean we have to pay more. It means that we could end up saving a lot of money just by building a more efficient electrical grid.

ALEXIS CHRISTOFOROUS: Makes a lot of sense, doesn't it? But certainly a massive, a massive effort. And it still needs to be signed into law, of course. All right, Rick Newman, thanks so much.