Companies
Power Giants NextEra Energy and Dominion Energy Eye $67B Link
The Duane Arnold nuclear plant in Iowa, shut down in 2020, is set for a NextEra Energy restart by 2029. The firm plans to acquire utility Dominion Energy to create a massive company with an estimated $250-billion market capitalization, but the stock deal faces state and federal regulator approval and is not expected to close for 12 to 18 months.
NextEra Energy, one of the largest U.S. power producers, announced May 18 that it has agreed to buy utility Dominion Energy in a mostly stock deal valued at nearly $67 billon that would combine two east coast energy giants and create the largest U.S. electricity producer with multiple megaprojects and about 10 million customer accounts.
The combined entity would have an almost $250-billion market capitalization and $430 billion enterprise value, which the companies said would make the new firm the “world’s largest regulated electric utility business by market capitalization and one of the world’s largest energy infrastructure companies.” It is also set to tank only behind ExxonMobil and Chevron, in terms of energy company valuation, as measured by the S&P Global Energy and Utilities tanking.
The new combined entity would become the nation’s largest operator of gas-powered power plants and of utility-scale battery storage, as well as second-largest U.S. nuclear power plant operator, the companies said. The transaction has been unanimously approved by both firms' boards of directors, they added, but could take up to 18 months to close with numerous sign-offs needed from state and federal regulators.
Florida-based NextEra has about six million customers through its Florida Power & Light unit and claims a market value of nearly $200 billion, while Virginia-based Dominion serves four million customers and is valued at more than $50 billion. NextEra shareholders will own about 75% of the company, with Dominion shareholders owning the rest. NextEra units operate nuclear power plants in Florida, New Hampshire and Wisconsin; solar and wind farms in states including Arizona and Texas; and nearly 13,000 miles of transmission lines in North America.
Dominion owns the Millstone nuclear plant in Connecticut, and has leased land in Chesterfield County, Va. to Commonwealth Fusion Systems to start construction of what would be the world's first commercial scale fusion power plant at 400 MW, .The utility also is providing it technical assistance although no financial support.
NextEra announced a partnership last year with gas turbine manufacturer GE Vernova to develop power plants serving data centers, and was picked by the White House in March to provide 10 GW of natural gas capacity in Pennsylvania and Texas under a trade deal with Japan. The company has also pursued clean energy projects and battery storage to meet short-term power needs of data centers and technology firms.
NextEra CEO John Ketchum would be chairman and CEO of the combined company, and Dominion Chair, President and CEO Robert Blue will become president and CEO of its regulated utilities and a board member. The combined company will operate under the NextEra Energy name, with dual headquarters in Juno Beach, Fla., and Richmond, Va.
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According to analysts, the purchase would enable NextEra to gain a strong footprint in the data center sector. Dominion's presence in Midatlantic states includes the so-called “Data Center Alley” in northern Virginia that has become a major hub for the artificial intelligence sector. Dominion has connected more than 450 data centers in Virginia, with the sector making up about 28% of its electricity sales in the state, Blue told an energy conference in Houston in March.
Dominion also is nearing completion of the nation's largest offshore wind energy project, the 2.6-GW Coastal Virginia Offshore Wind project off Virginia Beach, Va., despite a failed Trump administration effort—stopped by court order earlier this year—to halt installation of 176 turbines and related infrastructure. About 14 of the turbines, each rated at 14.7 MW, are complete and are starting to generate power. Four other east coast wind projects also successfully fought the orders in court, with most now generating power.
The VOW project is set for full completion by June 2027. Its price has increased from $9.8 billion to $11.4 billion due to cost pressures, including tariffs on imported components, with half of the project sold in 2024 to private infrastructure investor Stonepeak.
NextEra's Ketchum had not incorporated offshore wind into company development plans, calling it "capital intensive," but he told analysts after the deal announcement that "the project is online, and given the investment that’s been made there, it’s the right thing to do to finish it."
In a statement, Ketchum added that with projects "getting larger and more complex, customers need affordable and reliable power now, not years from now. We are bringing NextEra Energy and Dominion Energy together because scale matters more than ever—not for the sake of size, but because scale translates into capital and operating efficiencies,”
The two utilities would operate under NextEra’s name and trade on the New York Stock Exchange under ticker symbol NEE, with the CEOs noting the firms will have combined ownership of 110 GW of power generation capacity across all energy sources and a 130-GW pipeline of large customer prospects.
Dominion Gets Ratings Upgrades
Moody’s Ratings on May 18 affirmed Dominion Energy's ratings outlook rising to positive from negative, with NextEra agreeing to guarantee its debt after the transaction closes, "resulting in a one-notch upgrade from Dominion’s existing ratings," it said.
S&P Global said it “revised our outlook on Dominion [and its business units] ... to positive from stable." The ratings agency said it expects to see Dominion as a core element of NextEra going forward as "they operate in lines of businesses that closely align with [NextEra's] mainstream businesses and customer base ... [and] are highly successful at what they do.”
The deal would combine “two well-run utility franchises,” Alex Kania, BTIG managing director and utilities and power analyst, said in a research statement. The combined entity would be “one of just a few players in [the regional grid territory] of PJM Interconnection that could readily offer comprehensive grid and generation solutions to large load,” he said.
NextEra already has an agreement with Google linked to the intended restart by 2029 of the 601-MW Duane Arnold nuclear plant in Iowa and has partnered with tech giant Meta to add 190 MW of solar energy and 168 MW of battery storage to the grid in New Mexico. The firm also started commercial operation this year of the Crossroads-Hobbs-Roadrunner project, a 137-mile, $291.6-million 345-kV electrical transmission line also in New Mexico.
Customer advocate group Clean Virginia has asked state officials to review the proposed merger with "the most rigorous scrutiny possible,” citing what it said were rate hikes and ethical lapses in Florida by NextEra business unit Florida Power & Light. According to E and E News, NextEra also tried to purchase North Carolina-based utility Duke Energy in 2020, but no deal could be reached.
“I think we have really tried to thoughtfully structure this transaction," said Ketchum.
