NextEra and Dominion form massive new energy company amid growing AI usage

Deal Aims to Create World’s Largest Regulated Electric Utility Business

NextEra Energy has proposed an all-stock deal valued at approximately $67 billion to acquire Dominion Energy, creating a massive power company. The combined entity will serve around 10 million utility customer accounts across the US states of Florida, Virginia, North Carolina, and South Carolina.

The region is characterized by a fast-growing population and the world’s largest data centre hub in Virginia. The deal aims to enable a swifter build-out of power infrastructure to deliver electricity to data centres requiring approximately 130 gigawatts of electricity demand. One gigawatt can power around 750,000 homes.

NextEra Energy has been actively pursuing opportunities to supply electricity to data centres developed by Big Tech companies for training and rolling out AI technologies. The company recently signed an agreement with Alphabet’s Google to reopen a nuclear power plant in Iowa and announced plans to develop two Japan-backed natural-gas-fired data centre hubs in Texas and Pennsylvania.

Dominion Energy has nearly 51 gigawatts of contracted data-centre capacity, serving major customers including Alphabet, Amazon, Microsoft, Meta, Equinix, CoreWeave, and CyrusOne. The proposed merger comes as consumers express concerns about escalating electric bills, with some governors, attorneys general, and lawmakers pushing back against rate increases.

The deal’s terms include a fixed exchange ratio of 0.8138 shares of NextEra Energy for each share of Dominion Energy owned by shareholders. Dominion shareholders will receive a one-time cash payment of $360 million at closing. The combined company will have dual headquarters in Juno Beach, Florida, and Richmond, Virginia.

The deal is expected to close within 12 to 18 months, pending approval from both companies’ boards, as well as regulatory approvals.

Source: Al Jazeera