NextEra Energy, one of the largest U.S. utilities, is in advanced talks to acquire Dominion Energy, in a deal that could transform the utility industry as it races to provide electricity needed to fuel the booming growth of artificial intelligence, two people familiar with the matter said Sunday.
Tech giants are busily building data centers to supply the computing power for AI Peak electricity demand in the coming summers and winters is expected to jump more than 20 percent nationwide through 2035, due in part to data centers.
NextEra, whose shares are up 15 percent this year, has sought to capitalize on what its CEO, John Ketchum, has called “America’s golden age of power demand.” Last year it struck deals with Google in Iowa and Meta in New Mexico.
Florida-based NextEra, which has a market capitalization of about $194 billion, is discussing a deal that would exchange about eight-tenths of a share of its stock for each outstanding share of Dominion, the people said. NextEra shareholders would ultimately own about 75 percent of the combined company and get an additional small portion in cash, they added.
The people, who requested anonymity because the talks are confidential, said the deal could still change or fall apart. The Financial Times previously reported on deal talks, and Bloomberg reported on the potential deal terms.
Neither NextEra nor Dominion, based in Richmond, Va., responded to requests for comment.
The deal with Dominion, which would require approval from federal regulators, is the latest in a series of megadeals across various industries as executives and their advisers try to take advantage of agencies’ willingness to approve corporate consolidations under President Trump. Some hope the administration may be particularly open to mergers and acquisitions ahead of November’s midterm elections, seeing them as a signal of a strong economy.
The deal also requires local approvals, including in Virginia, whose governor, Abigail Spanberger, has promised to lower energy bills and make data centers pay more for electricity. Dominion operates retail plants in Virginia, North Carolina and South Carolina. It serves the largest cluster of data centers in the world, known as Data Center Alley, in 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 move NextEra into the Mid-Atlantic region, the nation’s largest electric market with 67 million customers in 13 states and Washington, DC
The agreement would mark the latest in a series of agreements across the United States as utilities try to manage pressure from rising demand for electricity, aging equipment that has been hit by extreme weather and climate events and higher utility bills that have become a focus of political campaigns.
Enthusiastic about artificial intelligence and the need for electricity, BlackRock, the world’s largest asset manager, and Blackstone, a private equity firm, announced acquisitions of some of the nation’s utilities last year.
In March, a consortium led by a subsidiary of BlackRock agreed to buy AES, a power company that owns several utilities in North and South America and power generation facilities globally.
The agreement party has become a political touchpoint. Concern over BlackRock’s acquisition prompted three Democratic senators to send a letter to the company’s chairman and CEO, Larry Fink, questioning how the company planned to provide affordable power to utility customers.
David Pomerantz, executive director of the Energy and Policy Institute, a nonprofit energy watchdog, argues that a NextEra-Dominion deal would hurt utility customers and give one company outsized influence over the utility.
“If regulators approve this merger, it will lead to higher electric bills for customers in Virginia and South Carolina,” said Mr. Pomerantz, whose organization has chronicled NextEra’s operations for years. “A mega-monopoly of this size, with the kind of money to buy political influence that NextEra will have, will be nearly impossible to regulate.”
Over the course of a century, NextEra has evolved into an influential power provider that began as a regional utility in Florida. The company now operates 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.
For years, NextEra has sought to expand its business by acquiring other utilities across the country, but with little success. Efforts to buy Hawaiian Electric, the state’s largest utility; Oncor, of Texas; and North Carolina’s Duke Energy, one of the nation’s largest retail providers, all fell through.
In 2019, NextEra bought 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 surge that caused significant increases in their bills. And the war in Ukraine increased fuel costs for many NextEra retail customers.
Although these costs have been alleviated, NextEra’s customers in Florida recently saw a $7 billion increase in their rates, greatly impacting residential customers and small businesses. The state-appointed consumer representative and a coalition of energy and legal organizations have appealed the rate increase to the Florida Supreme Court.
NextEra owns Florida Power & Light, which provides electricity to about 55 percent of Florida households, and has continually sought to grow its operations by buying cooperatives and municipal utilities. An attempt to acquire the Jacksonville Electric Authority, a municipal utility, for $11 billion ended after questions were raised about conflicts of interest within the city’s operations.
As it continues to seek to diversify its business, NextEra began pursuing other types of utility businesses outside of the electricity business. In 2022, the company completed the purchase of a water plant in Texas.
Dominion operates a diverse power generation fleet that includes three large nuclear power plants and has built one of the largest offshore wind farms in the country to serve its 4 million customers.
The utility had ambitions to help grow the nation’s offshore wind farms by building a 472-foot-long ship, named Charybdis after a mythical sea monster, to help install large turbines in the ocean.
But Mr. Trump’s disdain for offshore wind power has led to the cancellation of some projects and could hurt the more than $700 million Dominion has invested in the vessel.
Otherwise, Dominion has been widely seen as a stable company that expanded its own operations when it bought South Carolina utility SCANA in 2019 after the utility filed for bankruptcy following a failed nuclear project.
