The largest power industry merger in American history could lower electricity bills and accelerate an infrastructure build-out to power more data centers — if it can get past the affordability-politics buzzsaw.
The proposed tie-up, announced Monday, is designed for the age of AI. It would create a power behemoth on par with the world’s largest oil companies, made up of the country’s largest utility — NextEra Energy — and the one with the world’s largest concentration of data centers, Dominion Energy.
“I can’t stress enough that this is the defining moment,” NextEra CEO John Ketchum said Monday in an investor call. “The country needs more energy infrastructure built faster, more efficiently, and more affordably than ever before. Combining two great American companies can better achieve the speed and scale this moment demands.”
Ketchum said the agreement would result in lower costs for Dominion’s customers in Virginia, North Carolina and South Carolina through a two-year $2.25 billion payment that would knock off roughly $25 a month through 2028.
But elected officials in Virginia, where Dominion is a powerful fixture in the commonwealth’s politics, are wary of NextEra’s claims that a combination creating a dominant utility holding company can hold down costs for ratepayers in the long term.
“This merger needs to be strongly scrutinized for how it will impact energy bills,” Rep. Suhas Subramanyam (D-Va.), whose district includes “Data Center Alley” in northern Virginia, said in a statement. “A company that specializes in building energy infrastructure just bought a company that likes to increase rates for new infrastructure.”
The deal has to pass muster with federal regulators as well. Industry analysts say they expect it to get approval from the Federal Energy Regulatory Commission, which is under pressure from the Trump administration to speed data center connections to the nation’s regional power grids.
“With this administration so focused on winning the AI war, they’re going to do whatever it takes to try to help companies respond to the demand for gigawatts,” said James West, an analyst at Melius Research.
The deal also requires sign-off from the Nuclear Regulatory Commission, as well as state regulators in North Carolina, South Carolina and Virginia.
But Virginia could prove the biggest bump in the road. Democratic Gov. Abigail Spanberger, elected to office in November, ran on holding costs down for households seeing higher utility bills. Democratic Attorney General Jay Jones, whose office also acts as Virginia’s ratepayer advocate, could also put the deal under a microscope. The deal will require approval from Virginia’s State Corporation Commission.
“We take this role very seriously,” Jones’ spokesperson RaeAnn Pickett said, “and we will scrutinize the associated regulatory filings to protect ratepayers and evaluate the claims referenced in the announcement.”
Spanberger’s office didn’t immediately respond to requests for comment.
Both of the state’s Democratic senators urged caution. “Any proposed merger must put Virginia energy customers first and ensure ratepayers have access to reliable and affordable energy,” said a spokesperson for Sen. Mark Warner.
“The devil is in the details,” said a spokesperson for Sen. Tim Kaine, a former governor of Virginia.
In purchasing Richmond, Virginia-based Dominion, NextEra is acquiring a utility at the heart of America’s data center boom. Virginia is home to the world’s largest collection of energy-hungry data centers for cloud computing and artificial intelligence. Dominion’s steadily added more tech industry customers in recent quarters.
And as energy demand from data centers has ballooned, NextEra has positioned itself to be technology companies’ power supplier of choice. In January of 2025, NextEra announced a partnership with the gas turbine maker GE Vernova to develop power plants serving data centers. The company was also selected by the White House in March to develop 10 gigawatts of natural gas capacity in Pennsylvania and Texas as part of a trade deal with Japan.
The deal “is the clearest possible confirmation that the AI-driven power demand supercycle is not a cyclical trade but a decades-long infrastructure build,” Wedbush power sector analysts said in a note to clients Monday.
Dominion is a lobbying force in Virginia. For decades, the monopoly utility has been a major corporate contributor to legislative races, and that allowed it to get much of what it wanted through the Virginia General Assembly. That changed in recent year, as state regulators have come under political pressure to restrain utility rate increases — and as tension rises over who foots the bill for utility spending on infrastructure to serve data center demand.
Dominion has enough political baggage in Virginia that the commonwealth could emerge as the deal’s biggest obstacle, wrote Rob Rains, director of policy research at Washington Analysis.
State regulators will be using a regulatory test of costs and benefits to review the deal, he wrote, “so a settlement of some kind would be necessary to garner approval — and that still may not be enough.”
Alex Kania, a utilities and power research analyst at BTIG, said the states were likely to raise questions about the effects on retail power prices.
“Whenever you’re going to see a regulatory process like this, there’s going to be a lot of scrutiny that’s going to be applied to this affordability equation,” Kania said. “That’s going to be very important for NextEra and Dominion to demonstrate to all three of these states — that there are rate benefits to customers, that there are credit rating benefits as well.”
This isn’t the first time NextEra has attempted to purchase a major utility. In 2020, it attempted to purchase Duke Energy, but was rebuffed by the North Carolina-based utility giant.
NextEra executives expressed optimism they could close the deal with Dominion, estimating it would take 12-18 months to secure the needed regulatory approvals.
“I think we have really tried to thoughtfully structure this transaction. We put customers first,” Ketchum said.
Joel Kirkland and Benjamin Storrow contributed to this report.
