The U.S. Senate is so bitterly divided, it can barely get a quorum to agree on what day it is. So when the chyron on my television announced Tuesday: “Senate passes $1.2 trillion bipartisan infrastructure bill,” even a cynic like me was impressed.

The massive bill was approved by a vote of 69-30 in the 50-50 Senate. When I saw that Senate Minority Leader Mitch McConnell (R-KY) was among 19 Republican Senators to vote in favor, I almost did a spit take with my coffee.

To use a profane euphemism, Tuesday’s infrastructure vote is a BFD.

This rare display of bipartisanship reflects not just the urgent need to repair America’s crumbling infrastructure but also a truism of politics: “pork” is always appetizing for elected officials. A large chunk of the GOP caucus decided that bringing home jobs and money outweighed any temporary grief they may get from ideologues. Even McConnell, aka “Dr. No” for his habitual obstructionism, wants to bring home the largesse.

President Biden’s Build Back Better plan now advances to the Democratic-led House. Machiavellian maneuvers still lay ahead, but when the dust settles, the bill is likely to become law, mostly intact.

In previous columns, I’ve recommended that you profit from greater public works spending, by increasing your exposure to growth stocks in the construction and building industries. But here’s an investment theme that gets short shrift: you can leverage higher infrastructure spending to reap steady and robust dividends, in one sector in particular. I’ll explain, below.

The Senate’s approval of the infrastructure bill cheered investors Tuesday, sending stocks higher. The Dow Jones Industrial Average jumped 162.82 points (+0.46%) and the S&P 500 climbed 4.40 points (+0.10%), although the tech-heavy NASDAQ slipped 72.09 points (-0.49%). The Dow and S&P 500 closed at new record highs. The small-cap Russell 2000 rose 4.56 points (+0.20%).

The Russell 2000 has been moving roughly in tandem with improving economic sentiment; small caps tend to surge during expansions. Year to date the Russell 2000 is up 18.1%, compared to 13.4% for the S&P 500 (as of market close August 10).

U.S. stock index futures were trading flat early Wednesday, as optimism over the infrastructure bill played tug-of-war with fears over the COVID Delta variant. I expect the stock market to continue rising this year, but punctuated by pandemic-induced volatility.

Electrifying opportunities…

Many infrastructure companies generate predictable income distributions, typically because they’re government regulated and hold long-term contracts that provide reliable cash flow. For investors, this confers transparency into the sustainability of dividends.

It’s not just government money that’s flowing into infrastructure. The private sector is increasingly financing infrastructure projects because some governments around the world don’t have the cash and because investors are looking for new sources of return.

Governments are allowing the sale of securities to finance public-private infrastructure partnerships, and providing tax breaks and other perks to spur investment.

Roads, bridges, railways, sewer systems, waterways, and airports are major recipients of infrastructure funding, but an underappreciated area is power generation, which brings me to the utilities sector.

Utilities are a traditional source of high income and they face strong multi-year tailwinds. According to the latest semi-annual Electricity Market Report, released July 15 by the International Energy Agency (IEA), global electricity demand is on track to grow by 5% in 2021 and 4% in 2022, driven by population growth and urbanization in developing countries (see chart).

The majority of power demand increases will take place in the Asia Pacific region. More than half of this growth in 2022 will occur in China, the world’s largest electricity consumer. India, the third-largest consumer, will account for 9% of global growth.

Read This Story: Asia Goes Full Throttle on Infrastructure

Renewable electricity generation continues to grow strongly but can’t keep up with burgeoning power demand. After increasing by 7% in 2020, electricity generation from renewables is expected to grow by 8% in 2021 and by more than 6% in 2022.

Despite these sharp increases, renewables are on course to handle only about 50% of projected growth in global power demand in 2021 and 2022. Nuclear power generation will grow by 1% in 2021 and 2% in 2022. Fossil fuel-based electricity still dominates power generation, with projections that it will cover 45% of additional demand in 2021 and 40% in 2022.

The Biden infrastructure plan passed on Tuesday in the Senate contains measures that specifically benefit utilities. Notably, the package includes $73 billion to finance the upgrading of America’s power grid, including the laying of thousands of miles of transmission lines.

The plan also includes measures that expedite the permitting process for electrical transmission lines; this process is often snarled in red tape and can literally take decades. Enhancements to the nation’s electricity transmission system will be pivotal in supporting renewable energy projects and meeting decarbonization targets.

Regulated, U.S.-based utilities stocks are good proxies for dividend growth. Utilities also provide essential services, a virtue that tends to make their stocks resistant to recessions and even pandemics.

These companies are cash cows that generate juicy double-digit yields, year in and year out. If you’re an income investor looking to leverage the boom in infrastructure spending, our “dividend map” is for you. Click here for details.

John Persinos is the editorial director of Investing Daily. He also edits the premium publication, Utility Forecaster. You can reach him at: mailbag@investingdaily.com. To subscribe to his video channel, follow this link.