NextEra Energy, one of the largest U.S. power companies, is in advanced talks to acquire Dominion Energy, in a deal that could transform the power industry as it races to provide the power needed for the burgeoning growth of artificial intelligence, two people familiar with the matter said Sunday.
Tech giants are vigorously building data centers to provide the computing power needed for AI. Peak electricity demand in coming summers and winters is expected to increase by more than 20% nationally through 2035, driven in part by data centers.
NextEra, whose shares have soared 15 percent this year, is seeking to capitalize on what its chief executive, John Ketchum, called “the golden age of U.S. electricity demand.” Last year, it struck deals with Google in Iowa and Meta in New Mexico.
Florida-based NextEra, which has a market value of about $194 billion, is discussing a deal that would swap about eight-tenths of its stock for each outstanding share of Dominion, the sources said. NextEra shareholders would ultimately own about 75 percent of the combined company and receive a small additional portion in cash, they added.
The people, who requested anonymity because the negotiations are confidential, said the deal could still change or fail. The Financial Times previously reported on negotiations over a deal, and Bloomberg reported on the potential terms of the deal.
Neither NextEra nor Dominion, based in Richmond, Virginia, responded to requests for comment.
The deal with Dominion, which would require approval from federal regulators, is the latest in a series of mega-deals across different sectors as executives and their advisers try to take advantage of agencies’ willingness to approve corporate consolidations under President Trump. Some hope the administration will be particularly open to mergers and acquisitions ahead of the November midterm elections, seeing it as a sign of a strong economy.
The deal also requires local approvals, including in Virginia, whose governor, Abigail Spanberger, has pledged to lower energy bills and make data centers pay more for electricity. Dominion operates retail utilities in Virginia, North Carolina and South Carolina. It serves the largest cluster of data centers in the world, known as Data Center Alley, Virginia.
The combination of NextEra and Dominion could help reduce corporate and other costs, such as managing the two companies’ nuclear assets.
The acquisition would also give NextEra a foothold in the Mid-Atlantic region, the nation’s largest electricity market with 67 million customers in 13 states and Washington, DC.
The agreement would be the latest in a series of agreements reached across the United States as electric utilities try to manage pressures from growing electricity demand, aging equipment that has been battered by extreme weather and climate events and rising utility bills that have become the focus of political campaigns.
Capitalizing on the fervor over AI and the need for electricity, BlackRock, the world’s largest asset manager, and Blackstone, a private equity firm, announced last year the acquisition of some of the country’s utility companies.
In March, a consortium led by a BlackRock subsidiary agreed to acquire AES, a power company that owns several utility companies in North and South America as well as power generation plants around the world.
The wave of agreements has become a political touchpoint. Concerns over BlackRock’s acquisitions prompted three Democratic senators to send a letter to the company’s chairman and CEO, Larry Fink, asking how the company plans to ensure affordable energy for utility customers.
David Pomerantz, executive director of the Energy and Policy Institute, a nonprofit energy watchdog, says a NextEra-Dominion deal would hurt utility customers and give one company outsized influence in the utility industry.
“If regulators approve this merger, it will result in higher electricity bills for customers in Virginia and South Carolina,” said Mr. Pomerantz, whose organization has tracked NextEra’s operations for years. “A megamonopoly of this size, with the kind of money needed to buy the political influence NextEra will have, will be almost impossible to regulate. »
Over the course of a century, NextEra has grown into an influential electricity provider that began as a regional utility in Florida. The company now manages subsidiaries that own large solar and wind farms in the West, operates nuclear power plants in Wisconsin, New Hampshire and Florida and owns tens of thousands of miles of power lines.
NextEra has sought to expand its business by acquiring other utility companies across the country for years, but without much success. Efforts to buy Hawaiian Electric, the state’s largest utility; Oncor, Texas; and North Carolina’s Duke Energy, one of the nation’s largest retail utilities, all failed.
In 2019, NextEra purchased a small Florida utility, Gulf Power, which operates largely in the state’s panhandle. But after Hurricane Milton hit Florida in 2024, former Gulf Power customers faced a storm surcharge that led to a significant increase in their bills. And the war in Ukraine has increased fuel costs for many of NextEra’s retail customers.
Although these costs have decreased, NextEra customers in Florida recently saw a $7 billion increase in their rates, largely affecting residential and small business customers. The state-appointed consumer representative and a coalition of energy and justice organizations appealed the rate increase to the Florida Supreme Court.
NextEra owns Florida Power & Light, which provides electricity to approximately 55 percent of Florida homes and has continually sought to expand its operations by purchasing cooperative and municipal utilities. An attempt to acquire the Jacksonville Electric Authority, a municipal utility, for $11 billion has ended after concerns were raised about conflicts of interest within the city’s operations.
As it continues to look to diversify its business, NextEra has begun to look at other types of utilities outside of the electricity sector. In 2022, the company completed the acquisition of a water utility in Texas.
Dominion operates a diversified power generation fleet that includes three major nuclear power plants and has built one of the nation’s largest offshore wind farms to serve its 4 million customers.
The utility had ambitions to help develop the country’s offshore wind farms by building a 472-foot-long vessel, named Charybdis after a mythical sea monster, to facilitate the installation of large turbines in the ocean.
But Mr. Trump’s disdain for offshore wind power has led to the cancellation of some projects and could harm the more than $700 million Dominion has invested in the vessel.
Otherwise, Dominion was widely seen as a stable company that expanded its own operations when it purchased South Carolina utility SCANA in 2019, after that utility filed for bankruptcy following a failed nuclear project.
