Two years ago, my wife and I moved to Southeastern North Carolina. Here, prices for just about everything are lower than they are in Northern Virginia where we moved from.

But one line item that is more expensive in this mostly rural area is our monthly water bill. I’m not sure why that is since we live next to the Cape Fear River, and it rains here a lot.

Regardless of the reason, it has made me more aware of the regional nature of our national economy. And for a lot of folks living in certain areas of this country, the cost of water could go way up very soon.

Nuclear Power Play

Last week, I explained why I believe uranium will outperform gold over the remainder of this decade. As I noted then, “there is an energy crisis brewing due to rapidly increasing demand for data centers to support artificial intelligence (AI).”

For proof, you need to look no further than the performance of the Global X Uranium ETF (NYSE: URA) that I wrote about in July. Since trading below $20 five months ago, URA has more than doubled in value as shown in the chart below.

Without a doubt, demand for uranium will increase as this country expands its nuclear power capabilities. But there is another natural resource that will also experience a surge in demand once new nuclear power plants come online, and nobody seems to be paying much attention to it.

Not a Drop to Drink

There is a good reason why every nuclear power plant is built near a source of natural water. Whether it is a river, lake, or ocean, a constant source of abundant water is what keeps a nuclear power plant from overheating.

According to Bloomberg, “about two-thirds of new data centers built or in development since 2022 are in places already gripped by high levels of water stress. While these facilities are popping up all over the country, five states alone account for 72% of the new centers in high-stress areas.”

Bloomberg goes on to note, “More than 160 new AI data centers have sprung up across the US in the past three years in places with high concentration for scarce water resources.” Furthermore, “That’s a 70% increase from the prior three-year period.”

Water Wars

There was a time not long ago when clean, inexpensive water was taken for granted in this country. And that is still the case in many areas.

According to HomeGuide, “The average water bill in the U.S. is $49 per month, with most bills falling between $40 and $60 per month. However, monthly water bills range from $15 to $100+, depending on the household size, water usage, and location.”

HomeGuide further states, “A typical family of 4 uses over 300 gallons of water per day.” That figure probably won’t change much. Showers, faucets, toilets, and clothes washers account for 80 percent of residential indoor water use.

But what could change is the degree of competition for that water by non-residential users. According to Bloomberg (citing the International Energy Agency as its source), “an average 100-megawatt data center, which uses more power than 75,000 home combined, also consumes about 2 million liters of water per day.”

That means the average date center consumes as much water in a day as 1,761 average households. And since data centers tend to be built in rural areas where cheap land is plentiful, they can have a disproportionate effect on overall water consumption in those areas.

Delayed Reaction

Mark Twain is credited with famously saying, “Buy land, they’re not making it anymore.” The same sentiment can be applied to water. There is a finite supply of water on this planet, and demand for it is about to take off.

For that reason, investors looking to cash in on the AI boom may want to consider the Invesco Global Water ETF (NSDQ: PIO). According to this fund’s sponsor, PIO “will invest at least 90% of its total assets in companies listed on a global exchange that create products designed to conserve and purify water for homes, businesses and industries.”

So far this year, PIO has gained about 15 percent. That is slightly more than the 13 percent rise in the S&P 500 Index. Over the past three months, PIO has gained no ground at all as shown in the boxed area in the chart below.

In other words, there appears to be a delayed reaction in Wall Street’s interpretation of how a spike in demand for uranium will affect water prices. Although regulated utilities cannot raise prices based solely on demand, unregulated utilities may do so as they deem advisable.

Although only 24 percent of PIO’s total assets consist of utility stocks, its other holdings should also experience rising demand as consumers look for ways to use water more efficiently.

Most of us aren’t feeling enough pain in terms of our water bills to do something about it right now. However, that may soon change as more AI data centers come online.

When that happens, don’t be surprised if your water bill doubles or triples if you live in an affected area. Who knows, it may not be long until the price of water is listed next to gold and uranium as precious resources!