The megamerger proposed between electricity companies NextEra and Dominion Energy would create a corporate behemoth that could wield vast influence over state politics, just as the utility industry faces new scrutiny over soaring electricity costs.
As they attempt to create the country’s largest power company, the two corporations are pursuing a dual-track strategy to sew up the merger in the most critical place: Virginia, the home state of Dominion and the global epicenter of a data center boom that promises to juice utility profits.
To sell Virginia lawmakers on the deal, utility officials are dangling the promise of bigger and better grid investments to fill the soaring energy demand that otherwise threatens to spike power bills even further.
At the same time, the companies are looking to outrun legislative oversight by pushing the deal through Virginia’s time-constrained regulatory review before lawmakers have a chance to reshape or stop it.
Virginia Senate Majority Leader Scott Surovell said that the soonest new state laws on the merger could take effect likely would be July 2027 — months after the companies plan to have cleared the state’s review. And that’s if the legislature can even agree to take action.
“Probably the most we can do as a body is send a letter or something,” the Democrat said during a recent public meeting of energy policymakers. “But in the meantime, we can ask a lot of questions.”
The companies are racing a public campaign against the deal by consumer and environmental advocates who are warning Virginia policymakers to pay close attention to the experiences of Florida and other states, where NextEra has faced intense scrutiny — and seen other deals scuttled — over cost concerns and its history of aggressive political influence.
Florida Power and Light, NextEra’s utility subsidiary, has been tied to a string of scandals: including allegations that it propped up “ghost candidates” in political races, surveilled a journalist, engineered favorable media coverage and supported ballot measures designed to mislead voters.
The company agreed to a $150 million class-action settlement this month, after investors argued that NextEra and FPL’s handling of the scandals caused financial losses.
Years of lobbying also has delivered the company one of the highest rates of profit among utilities nationwide, with a recent $7 billion rate hike — among the largest in U.S. history — approved unanimously by Florida regulators and unopposed by the state attorney general.
Allowing NextEra to grow even more powerful by entering Virginia “should be worrisome to everybody,” state Sen. Schuyler VanValkenburg said.
But Virginia’s spiking demand for energy complicates the picture, the Democrat added.
“This is going to be a really big company. It’s going to be really hard to regulate,” VanValkenburg said. But “it can kind of flip both ways. … We do need a ton of energy supplies in Virginia.”
“There is a potential that the merger can do real work there,” he added. “The question is just: Does it come at too much of a cost?”
Neither company responded to requests for comment. Dominion executives have responded to lawmakers’ questions about NextEra’s history by saying its leadership has changed. Dominion officials also downplayed the potential corporate changes, offering assurances that the company’s current officials would remain in place; they would just have more resources in a bigger company.
“This is a critical moment for Virginia,” Ed Baine, president of Dominion Energy Virginia, said during a meeting this month of the state Commission on Electric Utility Regulation. “This is also a critical moment for our industry. … We need all hands on deck.”
But Baine said the combined company would remain responsive to lawmakers’ concerns.
“I’ll still be your throat to choke,” he told officials.
‘Monopolies monopolize — that’s what they do’
The gambit by the Florida- and Virginia-based companies carries national implications.
If state and federal regulators approve merging them into a single enterprise with a roughly $250 billion market capitalization, it could offer a model for utilities across the country that see the explosive growth of AI data centers as a generational opportunity for their bottom line.
The reason has to do with the way many U.S. utilities make money.
Monopoly utilities profit by building infrastructure, like power plants and transmission lines. Their customers generally pay the costs of those grid upgrades, along with a regulated rate of return for the utility. Bigger build-outs and higher costs mean a chance to earn more money — incentivizing overspending that critics call “gold-plating.”
Shielded from market forces, those monopolies are held in check mainly by regulators.
Those stakes mean the NextEra and Dominion merger could make Virginia a testing ground for a new era of utility power — just as the industry faces unprecedented political pressure over rising electricity costs.
Virginia is especially vulnerable to the kind of political influence NextEra has wielded in Florida, advocates warn. The commonwealth has no limits on campaign donations or election spending. And it is one of only two states where regulators are chosen by lawmakers, who often count Dominion as a top donor.
“Any special interest with a lot of money can use Virginia as a playground because of our lackluster campaign finance laws,” said Tim Cywinski, a spokesperson for the Sierra Club’s Virginia chapter.
Dominion, by far the biggest corporate spender in Virginia elections — having spent at least $40 million since 2020 — is already leveraging its influence in Richmond to push for the merger.
Since the proposed deal was unveiled last month, members of Virginia’s Democratic majority say utility officials have worked the phones to soothe policymakers’ concerns. Now, some Democrats are upbeat on it.
Del. Destiny LeVere Bolling, the House Democratic whip and a member of the committee with oversight over utilities, said Dominion offered her the chance to talk with top executives about how a merger could unlock new energy investments into Virginia.
“I’m cautiously optimistic,” she said. “The grid strain is real. And so, I think the possibility to expand the company equals the possibility to expand our energy — both traditional energy resources but also renewable energy sources. Which is really exciting, because that’s what we need.”
Since 2020, U.S. electricity prices have risen by more than one-third, substantially more than overall inflation. NextEra and Dominion say their combined size will help get those rising costs under control, promising $2.25 billion in credits to customers if the deal goes through.
“Projects are getting larger and more complex,” John Ketchum, CEO of NextEra Energy, said in a statement announcing the merger with Dominion. “Scale translates into capital and operating efficiencies. It enables us to buy, build, finance and operate more efficiently, which translates into more affordable electricity for our customers in the long run.”
Meanwhile, the companies are telling investors the merger would drive aggressive new earnings targets — a transformation in what has historically been a slow and steady corner of Wall Street.
Combined, the businesses expect to deliver earnings growth of more than 9 percent each year. That’s supported by a combined rate base expected to grow 11 percent annually through 2032. Dividends are also expected to rise.
Those “industry-leading growth expectations,” the companies said, would be anchored by a pipeline of 130,000 megawatts in new large-load demand, primarily data centers.
That tension — between promises of customer savings and projections of Wall Street-beating growth — is at the heart of critics’ concerns about the merger.
“They smell an opportunity here to squeeze more profit out of Virginia than Dominion has been able to thus far — especially in regards to its cash cow, which is data centers,” said Shelby Green, a Florida-based research and communications manager for the Energy and Policy Institute, a utility watchdog.
The combination of politically powerful utilities and skyrocketing electricity demand, consumer advocates say, sets ripe conditions for those companies to remake the economy in ways that could cost residents and other businesses.
“Monopolies monopolize — that’s what they do,” said Brennan Gilmore, executive director of Clean Virginia, a group that advocates for limiting utility influence in politics.
Pending $150M class-action settlement
In the Sunshine State, critics of Florida Power and Light have a message for Virginia lawmakers considering the merger.
“Don’t let them in,” said José Javier Rodríguez, a Democratic candidate for attorney general and outspoken critic of FPL.
Rodríguez lost his 2020 state Senate reelection bid by 32 votes to a Republican challenger after a “ghost candidate” who shared his last name drew more than 6,000 votes.
Political operatives tied to Matrix, a third-party consulting firm retained by FPL, were found to have supported ghost candidates in three 2020 political races, including Rodríguez’s, who did not actively campaign but drew votes away from other candidates.
FPL’s former CEO, Eric Silagy, wrote in a 2019 email forwarded to Matrix consultants that he wanted Rodríguez’s life to be made “a living hell.”
FPL and Silagy have previously denied wrongdoing, and Silagy stepped down as CEO in 2023. NextEra agreed to a $150 million class-action settlement with investors this month over its handling of Matrix-related political controversies, who argued Silagy’s retirement coincided with a drop in the company’s stock price.
The settlement still must be approved by the U.S. District Court in the Southern District of Florida, and NextEra and FPL have emphasized as part of the settlement proposal that the companies still deny “having engaged in any wrongdoing whatsoever.”
If approved, the settlement would be the largest securities fraud class-action settlement the court has seen in three decades, according to the plaintiffs’ counsel.
The utility company also came under fire after Matrix consultants surveilled and collected personal information on a journalist who wrote critically about FPL, and shared the information with an FPL executive.
Rodríguez, who has pledged to scrutinize FPL as attorney general, said the proposed merger is “incredibly dangerous.” FPL is already a political heavyweight in Florida, funneling millions of dollars into state political campaigns and allegedly lobbying against legislation that would require regulators to address affordability when considering rate hikes. Merging with Virginia could potentially grow the influence of an already overpowered company, critics argue.
“Do what you got to do in Virginia,” Rodríguez said. “But … our interest would be, don’t make them even more powerful, please.”
Beyond its political influence, Florida Power and Light commands one of the highest profit rates in the country, even as Florida nearly tops U.S. rankings for disconnections due to customers falling behind on bills.
Most recently, the utility company drew fire for a nearly $7 billion rate hike settlement that was approved in 2025, which is currently being appealed at the Florida Supreme Court.
FPL defended the move as a positive step for its consumers.
“FPL customers are benefiting from the unanimously approved agreement, which enables FPL to make smart investments to power Florida’s growth, deliver some of the most reliable electricity in America and keep customer bills as low as possible,” an FPL spokesperson said previously of the settlement.
Jordan Luebkemann, an attorney with the environmental advocacy group Earthjustice representing plaintiffs in the FPL rate hike appeal, said he anticipates the merger could result in NextEra seeking to raise its return on equity in both Virginia and Florida.
NextEra may try to offset the cost of acquiring Dominion by directing subsidiaries to “squeeze out more profits wherever they can to pay back that debt and to increase their earnings per share,” Luebkemann said.
“Frankly, I can’t see how this could possibly be a good thing for Dominion ratepayers,” he said. “I fully expect that NextEra will pursue the same strategies that it has elsewhere to drive up rates and bills to increase its shareholder profits.”
Turned away in other states
NextEra has seen three prospective acquisitions fall apart in the last decade following pushback from state officials. But the company likely has found a more favorable legal and political landscape in Virginia.
Opposition from Texas and Hawaii regulators sank the company’s plans to acquire regulated monopolies in those states. But Virginia law sets a relatively low bar for the merger, Clean Virginia’s Gilmore said.
The commonwealth’s standard is that a utility acquisition must not impair public service at reasonable rates. “And we’re at a pretty shitty baseline,” Gilmore said, “so we’ve got to figure out how we’re gonna fight that.”
South Carolina lawmakers helped scuttle NextEra’s bid to buy Santee Cooper, the state’s largest power and water utility. The company dropped the acquisition effort after lawmakers voted to obtain internal documents on NextEra’s lobbying, campaign donations and other influence efforts.
Virginia lawmakers have expressed interest in scrutinizing NextEra, too. But Virginia law likely precludes the legislature from repeating South Carolina’s strategy.
The commonwealth’s State Corporation Commission would have 180 days to approve or deny the companies’ merger application, which they plan to submit between July and the end of September.
“I’m not sure there’s any legislation we could adopt or anything like that, because I don’t think there’s time for that,” said Surovell, the Senate majority leader.
But others said that unless lawmakers do something to subject the deal to more scrutiny, the companies will maximize their own benefits at the expense of the rest of the state.
Scott Hempling, a longtime mergers attorney, told lawmakers that substantive review of such a complicated transaction within just six months is “not possible.”
“There has never been in Virginia — and never been in the industry — a transaction this big,” he said.
