Data centers raise stakes on proposed utility merger
The South Carolina Public Service Commission is reviewing a $67 billion merger between NextEra and Dominion Energy, with critics pushing for a slower review due to concerns about data center power and water usage. State legislative leaders support an expedited timeline, while Virginia's governor is skeptical of the merger's benefits for ratepayers. South Carolina lawmakers are urged to create a regulatory framework for data centers before new capital flows in post-merger.
The South Carolina Public Service Commission (PSC) is under pressure to swiftly approve a proposed $67 billion merger between Florida's NextEra and Virginia's Dominion Energy, a deal touted as the largest utility merger in U.S. history. S.C. legislative leaders, including House Speaker Murrell Smith and Senate President Thomas Alexander, have formally intervened in the PSC case, advocating for an expedited six-month timeline. This move follows a Smith-sponsored 2025 energy bill aimed at streamlining power plant approvals.
Conversely, a coalition of South Carolina ratepayers, business leaders, environmentalists, and Dominion shareholders, led by S.C. Small Business Chamber of Commerce President Frank Knapp, are urging the PSC to extend the review process. They argue a quick decision serves only the companies' interests, potentially at the expense of ratepayers. Virginia Governor Abigail Spanberger also expressed skepticism, announcing her intention to intervene on behalf of Virginia ratepayers, fearing negative impacts on affordability and clean energy goals.
A key point of contention is the significant role of data centers, which NextEra CEO John Ketchum stated would drive the need for 15 gigawatts of new power generation. Data centers are increasingly controversial in South Carolina due to their high water and power consumption. S.C. League of Women Voters Vice President Lynn Teague highlighted that data centers are making Dominion an attractive target. Virginia is already the world's largest data center hub, while South Carolina's unregulated market is rapidly growing, with over 32 hyperscale projects planned or built.
Beaufort Republican Sen. Tom Davis expressed concern over the legislature's failure to pass a bill establishing a regulatory framework for data centers before adjourning. He emphasizes the need for regulations requiring hyperscalers to use environmental best practices and utilities to demand financial stability proof from these customers, preventing ratepayers from bearing costs if projects fail. Davis fears that with the merger potentially approved before the next legislative session, it will be harder to pass such benchmarks against a massive new utility's lobbying efforts, although he believes the legislation "has to" pass next year.