Dominion merger likely to mean more power for data centers

The planned merger of NextEra Energy and Dominion Energy would create the largest regulated utility company in the world — a development that could have big impacts on everything from the price of electricity to the time it takes to power data centers.

The $67 billion agreement is not yet a done deal. It still needs state and federal approvals, a process estimated to take between 12 and 18 months.

But if it does move forward, one thing seems certain, analysts say. The merger would create a company with the size and capital to generate enough power — and build enough transmission infrastructure — to address the unprecedented energy demand of Virginia's booming data center industry.

Virginia is already the data center capital of the world, but the pace of new construction has slowed due to one limiting factor: Dominion’s long wait time for power delivery, which is now four to seven years.

There were also rising doubts about whether Dominion could ever generate or deliver the huge amount of power needed by data center projects waiting in the wings. NextEra says the merged company will help meet that demand.

“The combined company's unmatched scale and operating platform would enable us to meet electricity demand while maintaining affordability across Florida, Virginia, North Carolina and South Carolina,” NextEra CEO John Ketchum said in a conference call after the merger was announced on May 18.

“Scale matters more than ever — not for the sake of size, but because scale translates into capital and operating efficiencies,” he added.

Andrew Bischof, an analyst for Morningstar, agreed with that assessment.

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