The deal that would have NextEra Energy outright purchasing Dominion Energy is about meeting electricity demand from data centers that run AI.
That’s what the analysts who cover the energy industry are saying about the proposed $66.8 billion all-stock deal, anyway.
“Electricity demand is rising faster than it has in decades. We are bringing NextEra Energy and Dominion Energy together because scale matters more than ever,” NextEra CEO John Ketchum said in a statement on Monday, adding later, in a call with investors, that the goal with the acquisition is that NextEra Energy can become the “go-to partner for large load customers,” referring, wink, wink, nod, nod, to the tech companies building huge data centers.
NextEra Energy, based in Juno Beach, Fla., on Florida’s east coast, about 80 miles north of Miami, has plans to build in the area of 30 new data center hubs across the U.S. to help meet demand from AI.
Dominion Energy is attractive here because it provides the power for the Northern Virginia data center market, which is the largest constellation of data centers in the world.
The combined company would have a market cap at $249 billion, which would make it the largest regulated electric utility on the planet, and overall, the third-largest company in the energy sector, behind fossil fuel giants Exxon Mobil and Chevron.
“Dominion Energy and NextEra Energy share a deep commitment to delivering reliable and affordable energy and to the customers and communities we are honored to serve,” said Robert Blue, the chair, president and CEO of Dominion Energy.
“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,” Blue said.
The deal still needs approval from state and federal regulators, a process that is expected to take 12-18 months.
You can expect that those who are actively opposing the massive data center buildout will use the regulatory process to their political advantage.
“Virginia has spent years fighting to reform a utility monopoly that puts shareholders ahead of customers. We cannot allow this merger to make that problem larger, more powerful, and harder to fix,” said Brennan Gilmore, executive director of Clean Virginia, a big player in Virginia politics – and by big player, I mean, more than $23 million in contributions to Virginia Democrats dating back to 2018.
Emphasis on big in the big player there.
We’re talking, $1.6 million to Attorney General Jay Jones, $1.2 million to Gov. Abigail Spanberger, just for starters.
“Virginians don’t choose their electric utility. That’s why the law requires utilities to serve the public interest — and precisely why any merger must be judged by one standard: does it make life better for the people who have no other option?” Gilmore said.
Yeah, this one is going to keep our State Corporation Commission busy for the foreseeable.
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Chris Graham
