NextEra and Dominion Energy Merge to Create the Largest Utility Giant

THE GIST

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It’s the largest deal on record for the power sector: NextEra Energy is buying Dominion Energy in a $67 billion all-stock deal. It will unite two of the strongest players in the race to meet growing electricity demand from AI data centers.

WHAT HAPPENED

Dominion is the utility responsible for powering the world's largest data center market in northern Virginia. NextEra is the largest utility in the S&P 500 by market value. The result of the merger is a structural reorganization of American energy around one central plot: AI's hunger for power as the defining infrastructure story of the next decade.

The combined entity would serve around 10 million utility customers across Florida, Virginia, and the Carolinas, and own 110 gigawatts of electricity generation. The strategic logic is explicit: The two companies' combined construction backlog of 130 gigawatts exceeds their existing total power generation. So they’re merging both what they have, and what they plan to build — and the pipeline is enormous.

This is all linked to the need of the hour: hyperscaling AI data centers.

Virginia-based Dominion has nearly 51 gigawatts of contracted data-center capacity and counts Alphabet, Amazon, Microsoft, Meta, Equinix, CoreWeave, and CyrusOne as its customers. NextEra, meanwhile, brings the construction and development machine.

NextEra shareholders will own nearly 75% of the joint company, and the deal is offering $2.25 billion in bill credits for Dominion customers in the mid-Atlantic region over two years after the merger closes, which is mostly to prevent regulatory and public backlash.

WHY IT MATTERS

Officials and lawmakers in at least six states — Arizona, Indiana, Maryland, New Jersey, New York, and Pennsylvania — are going to new lengths to block rate increases proposed by utilities, as consumers worried about escalating electric bills push back against AI data centers.

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The $2.25 billion in bill credits is NextEra reading the room on that backlash: It’s an attempt to buy regulatory goodwill in Virginia and the Carolinas before the deal even reaches the Federal Energy Regulatory Commission (FERC).

The numbers hovering over AI power demand make the deal’s logic self-evident. By 2030, data centers in Virginia alone will need more than 33 gigawatts. That exceeds the total power demand of many entire U.S. states. And no one can do it alone. This merger is essentially an admission that the capital requirements and construction timelines involved in serving hyperscalers — Microsoft, Google, Amazon, Meta — have outgrown what any individual utility can finance and build independently.