The proposed NextEra-Dominion merger has quickly become a debate over size, scale and shareholder value. It should be a debate about whether this transaction will make electricity more affordable for customers.
To date, the companies have yet to clearly demonstrate how the transaction will produce lasting affordability for customers.
NextEra has led the conversation with $2 billion in customer bill credits. That’s an attractive headline, but it isn’t a cost containment strategy. Bill credits expire. Utility mergers don’t.
The combined company would control one of the nation’s largest regulated utility footprints while pairing Dominion’s rapidly growing load — driven largely by data centers — with NextEra’s extensive generation and infrastructure development business.
Investors may see opportunity. Regulators, however, have a different responsibility: determining whether the transaction serves the public interest and produces measurable benefits for customers.
America needs more generation and transmission to meet growing demand, yes. But regulators should carefully examine whether this merger will reduce customer costs or simply increase the amount of investment ultimately recovered from captive ratepayers.
History suggests that those questions deserve careful scrutiny.
Dominion understands the consequences of large utility investments that don’t go according to plan. Its acquisition of SCANA brought with it the legacy of the failed V.C. Summer nuclear project, which cost ratepayers roughly $12 billion. More recently, Dominion’s Coastal Virginia Offshore Wind project has seen costs climb by more than $1 billion. You can quickly see how minimal those $2 billion in credits can be.
These aren’t just questions being raised by market participants. Virginia Lt. Gov. Ghazala Hashmi recently challenged whether regulators have enough information to independently verify the companies’ claims, warning that merger applicants often control the narrative while the public is left evaluating broad promises rather than measurable commitments. And –– in a more recent and unprecedented event –– Virginia Gov. Abigail Spanberger announced plans to intervene in the proposed merger.
This isn’t NextEra’s first attempt to acquire a utility. Regulators in Hawaii ultimately rejected its acquisition of Hawaiian Electric after concluding the companies had not demonstrated sufficient customer benefits. Proposed acquisitions in Texas, South Carolina and Jacksonville likewise failed to reach the finish line. None of those outcomes determines the merits of this transaction. But they do underscore why regulators should independently verify — not simply accept — the applicants’ claims.
If this merger will deliver lasting affordability, the companies should explain:
- Where the savings will come from;
- When customers will realize those savings;
- How they will be measured; and
- What protections exist if those savings fail to materialize.
Those answers matter far more than bill credits.
