Few energy companies have navigated the Trump era like NextEra Energy.
The White House selected the Florida-based power giant to build a pair of massive natural gas plants in Pennsylvania and Texas in March, as part of a wider $550 billion trade deal with Japan. But even as NextEra embraced President Donald Trump’s call for more gas, its executives made clear during their quarterly appearances before financial analysts that they believed renewables and batteries are the quickest ways to meet soaring energy demands from data centers.
Now, NextEra’s proposed $67 billion merger with Virginia-based Dominion Energy stands to test those competing strategies on the front lines of artificial intelligence.
The deal would create a super utility with a market capitalization on par with some of the country’s largest oil companies. It would also give NextEra a foothold in one of the country’s fastest-growing data center markets and see it take over construction of the largest offshore wind project in America — the very industry that has drawn Trump’s ire.
Analysts said the merger has the potential to accelerate grid modernization efforts in Virginia, relieve skyrocketing utility bills and speed the transition to a greener power system. But whether NextEra can deliver on those promises will depend on its ability to win over utility regulators in the states where Dominion operates — especially in Virginia, where Dominion is a fixture in the commonwealth’s political and business circles.
“This deal has the opportunity to have great outcomes for customers and the energy transition, but it’s going to depend on the regulators doing their jobs,” said Allison Clements, a Democrat who served on the Federal Energy Regulatory Commission. “I think the regulators need to dig in their record in a way that ensures that opportunities related to better grid utilization to the quicker deployment of cheaper resources are more than just unkept promises.”
The White House did not respond to a request for comment. But analysts said they expected the deal to receive little resistance at the federal level, where the Trump administration has prioritized bringing on new power as quickly as possible to meet data center demands.
It may be a different matter in the states. Dominion has long been one of the most influential voices in Richmond, the Virginia capital, and local leaders may be loath to see it engulfed by a larger company, analysts said.
“The regulatory approvals on this are going to be super intense,” said Abe Silverman, an assistant research scholar at Johns Hopkins University who tracks the region’s power markets. “It’s a hard thing to give up control over your homegrown utility.”
NextEra essentially operates two different businesses. In Florida Power and Light (FPL), it runs a massive regulated monopoly and has rebuffed attempts at competition in the Sunshine State, notably fighting efforts by homeowners to install solar on their roofs.
But the company’s development arm, NextEra Energy Resources, operates in competitive wholesale markets and is the largest builder of wind and solar projects in the country. That business has ramped up development of new gas facilities in recent years, seeking to satisfy the demands of Trump and technology companies alike. It formed a partnership with GE Vernova, the turbine-maker, to develop power plants serving data centers and was selected by the White House in March to build 10 gigawatts of new gas capacity in Pennsylvania and Texas.
It remains to be seen which version of NextEra that Virginia would get.
In Dominion, NextEra is purchasing a regulated utility that more closely resembles FPL than the company’s development business. Dominion is the largest utility in Virginia, where it has roughly 2.8 million customers and serves another 800,000 people through a South Carolina division. The company also operates a large nuclear power plant in Connecticut.
The merger would put NextEra in a state that is home to the world’s largest collection of data centers, and into the debate over how to meet technology companies’ demand for power without saddling consumers with higher electric bills.
Dominion has historically been slow to embrace new technology, like reconductoring power lines to increase their capacity, said Jigar Shah, who served at the Energy Department during the Biden administration. That has hindered the utility’s ability to meet data centers’ electricity demands and helped spur public opposition to the energy-hungry facilities. NextEra, by contrast, has been quick to embrace new technologies like renewables and storage, both at FPL and in its development arm, Shah said.
“NextEra has been a dedicated user of modern technology,” Shah said. “They have been an early user of solar within their territory, they’ve been an early user of batteries in their territory.”
Analysts at ClearView Energy Partners said in a client note Monday that the agreement could make it easier for the combined entity to finance and develop the type of “bring your own new capacity” agreements that both states and the federal government have sought. Trump urged tech companies in March to provide their own power at new data centers, in a move to soften rising utility costs on residents.
But other analysts said the merger could be a distraction at a time when mid-Atlantic governors are engaged in a tug of war with the local grid operator, the PJM Interconnection, over how to meet data centers’ needs, Silverman said.
“It can be very disruptive at a time of enormous change in ratepayer pressure to now have the topic shift from new data center integration and building of new generation,” he said. “They’re going to take the next 12 months or 18 months to make it all about mergers and acquisitions. I just see a real danger that people are going to take their eye off the ball.”
Executives for NextEra and Dominion sought to allay concerns in a conference call announcing the proposed merger. They said the new company would be able to move faster and more efficiently to bring new resources online. John Ketchum, the CEO of NextEra, said the company planned to finish Coastal Virginia Offshore Wind, the $11.4 billion wind project being built by Dominion.
He also touted NextEra’s experience as the country’s largest battery developer, saying the company sees opportunities in a new Virginia law that requires Dominion to secure 20 GW of energy storage by 2045.
In a note to clients, analysts at Jefferies said battery storage might be the best way for NextEra to win over Virginia.
“We could actually see NextEra as being welcomed in Virginia broadly with many stakeholders critical of Dominion for its focus on fossil fuels,” they wrote. If NextEra “focuses on storage development under the new Democratic legislation recently passed, it could form a coalition of support.”
Kelsey Tamborrino contributed to this report.
