Florida-based NextEra Energy on Monday announced plans to acquire Dominion Energy, creating what officials called “the world's largest regulated electric utility business,” worth more than $400 billion.
The companies have entered a definitive agreement to combine in an all-stock, tax-free transaction, according to a joint news release. They will need approval from state and federal regulators.
"This combination brings together two strong operating platforms and creates an even stronger energy partner for Virginia, North Carolina, South Carolina and Florida, with the scale and balance sheet to deliver the generation, transmission and grid investments our customers and economies need,” Dominion president and CEO Robert Blue said in the statement.
The combined company, serving about 10 million customers, would use NextEra’s name on the stock exchange, with dual headquarters in Richmond and Juno Beach, Florida. But Dominion will continue to operate under its own name.
NextEra shareholders would own about 75%. Dominion shareholders would receive $360 million in cash when the deal closes.
Company leaders say combining their resources will “drive affordability in the long term” by facilitating more investments in building and maintaining power sources and responding to storms.
The deal proposes bill credits totaling $2.25 billion for Dominion customers in Virginia and the Carolinas across two years.
It’s not immediately clear how the merger would eventually affect electricity rates.
State regulators last year approved the first increase to Dominion’s base electricity rate since 1992, raising monthly energy bills by an average of $11.24. Another $2.36 will be added in 2027, meant to cover rising fuel costs. (Other increases in recent years often came in the form of riders, separate line items associated with a specific project, such as the Virginia Beach offshore wind farm.)
In a statement shortly following Monday’s announcement, Brennan Gilmore with the nonprofit Clean Virginia said, “one-time credits are a down payment on political goodwill, not a guarantee of affordability.
“The question Virginians need answered is simple: What would NextEra charge us to earn its profit, and for how long? That number, return on equity, is absent from everything they've said today. Virginians should be extremely skeptical given Next Era’s long history of increasing prices to customers."
Virginia is a hotspot for exploding energy demand from power-hungry data centers.
That makes it an attractive market for NextEra, whose CEO John Ketchum said last year America is in a “golden age of power demand.” He was announcing agreements with Google to accommodate artificial intelligence with more nuclear power.
NextEra has previously attempted to buy other utilities around the country, including Duke Energy in North Carolina.
David Pomerantz, executive director of the watchdog nonprofit Energy and Policy Institute, told the New York Times he expects the potential merger to lead to higher bills in Virginia.
“A mega-monopoly of this size, with the kind of money to buy political influence that NextEra will have, will be nearly impossible to regulate,” he said.
