Dominion Energy acquisition by NextEra Energy: What it means for Virginia customers

RICHMOND, Va. (WWBT) — Dominion Energy is being acquired by Florida-based NextEra Energy in a deal that would create one of the largest energy providers on the East Coast.

The $67 billion all-stock deal comes as talks of data centers increase all over Virginia, and the demand for electricity skyrockets. Dominion is promising billions of dollars of credits to its customers in several states, and the company says it will come down to about $1.7 billion for Virginia customers.

Right now, it is not clear if that will be divided up evenly or how it will be broken down.

The nonprofit Clean Virginia, however, believes that the credits are not enough to make up for what the Executive Director sees as long-lasting impacts of the deal.

“It’s a one-time thing to engender good political goodwill in the state, but it’s not a policy,” Clean Virginia Executive Director Brennan Gilmore said. “In the same release and the same announcement, they expected that their business would grow 11% on the backs of data center growth. That can drive higher bills unless the profits of these utilities are appropriately limited.”

Gilmore says NextEra’s customers in Florida already went through a rate hike, and he does not want Virginia customers to go through the same.

Meantime, Dominion is promising to keep bills affordable. It also plans to maintain its Richmond headquarters.

If the companies merge, Dominion Energy will keep its name in Virginia and its leadership team here, while NextEra will also have a headquarters in Florida and an operational base in South Carolina.

“Both companies put our customers and teams first, as well as the communities we serve,” NextEra President and CEO John Ketchum said in a statement.

VCU Associate Dean of Strategic Affairs and Research Initiatives Max Mohan says oftentimes in acquisitions like this, there is a shift of power after a couple of years.

“So what that means for the Richmond area remains to be seen,” Mohan said. “Dominion’s been a longstanding presence here and to lose some of the energy around that would perhaps not be in the best interest of a capital city like Richmond.”

A Dominion spokesperson said there will be plenty of work to do in Virginia. The company is guaranteeing employment to its staff for 18 months after the deal goes through and compensation for 24 months after it does.

“It’s hard to not acknowledge the fact that this is just going to create a colossus. It’s going to be the largest energy provider on the East Coast if it passes through regulatory approval,” Mohan said. “If I were a consumer, I would be a bit more cautious.”

Mohan says it is likely Virginia’s data center expansion that attracted NextEra, as it creates a path for AI growth.

There is still a lot of time before this deal could be approved. A lot could change in the next 12-18 months, and it is possible for it all to get blocked.

“One thing to note, NextEra has tried to acquire other utilities in the past in Texas and South Carolina and other places, if I’m not mistaken, which have not gone through as they’ve gone through the regulatory process. So it’s not new for them to want to acquire a company like Dominion,” Mohan said.

While Clean Virginia is calling on Virginia leadership to step in and prevent the merger from happening, Governor Abigail Spanberger says it is too early for her to take a stance.

“Certainly it’s expansive in its size and scope, and so I will be continuing to dig into that one heavily,” Governor Spanberger said.

Dominion Energy declined an interview on the merger.