NextEra-Dominion merger: What’s in store for Virginia?
A proposed $66.8 billion merger between Dominion Energy and NextEra Energy is expected to face strong opposition in Virginia, primarily due to concerns over rising electricity rates linked to data center growth. The deal requires approval from state utility regulators and federal bodies, with analysts predicting a contentious battle at the Virginia State Corporation Commission.
The proposed $66.8 billion merger of Dominion Energy, a Richmond-based utility, and Florida-based NextEra Energy, set to create the world's largest regulated electric utility, is expected to encounter significant opposition in Virginia. The all-stock transaction, which aims to combine operations serving approximately 10 million customer accounts across Florida, Virginia, and the Carolinas, has been unanimously approved by both companies' boards and is anticipated to close within 12 to 18 months.
However, the deal requires approvals from state utility regulators in Virginia, North Carolina, and South Carolina, as well as federal bodies including the Federal Energy Regulatory Commission, Federal Trade Commission, and the U.S. Department of Justice. Analysts, including Rob Rains from Washington Analysis, highlight the strategic logic behind the merger, noting Dominion's substantial load growth, primarily due to the rapid expansion of data centers in Virginia, which NextEra can capitalize on with its capital and generation capabilities.
Opponents, spearheaded by advocacy groups like Clean Virginia, are preparing for a contentious battle at the Virginia State Corporation Commission (SCC). Clean Virginia Executive Director Brennan Gilmore expressed concerns about NextEra's track record, particularly citing its subsidiary Florida Power & Light's significant rate hike in Florida. Critics argue that the merger could exacerbate issues like rising electricity rates for Virginia ratepayers, who have no choice in their utility provider, and fear it could give the combined entity undue influence.
The Virginia Attorney General's Office, representing ratepayers, also plans to scrutinize the regulatory filings. The opposition in Virginia is amplified by existing public and legislative resistance to data center growth, particularly in Northern Virginia, where localities like Loudoun County have already halted "by-right" zoning for new data center proposals, requiring developers to seek rezoning approvals. The SCC's decision on the merger is crucial, with potential recusal by Chair Kelsey A. Bagot due to prior employment at NextEra, and the possibility of settlements between the companies and stakeholder groups to secure approval.