Most utility deals are about size, costs, and rate base. This one is about chips.
NextEra just agreed to pay nearly $67 billion for the company that already powers the world's biggest data center market.
The combined company would have a market cap of about $249 billion and an enterprise value near $420 billion, making it the third-largest U.S. energy company behind Exxon Mobil and Chevron.
NextEra holders end up with 74.5% of the combined company, with Dominion holders getting the rest. Everything will trade under NextEra's NEE ticker on the New York Stock Exchange.
Investors picked sides fast on Monday, sending Dominion shares up almost 11% while NextEra fell more than 4%.
NextEra CEO John Ketchum said in a statement that "electricity demand is rising faster than it has in decades," and that the firms are joining forces "because scale matters more than ever."
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Dominion is the utility responsible for northern Virginia, which holds more data center power capacity than any other region in the world, while NextEra is the biggest renewable energy developer in the country and runs the largest utility in the S&P 500 from its base in Florida.
Together, the two would be the world leader in renewables and battery storage, the U.S. leader in natural gas, and the second-largest nuclear operator.
Ketchum said the combined business plans to build more than 30 data center hubs across the country, with the goal of becoming the "go-to partner" for AI's largest power buyers.
That builds on the work NextEra is already doing with Big Tech, after the company cut a deal with Alphabet's Google last year to reopen the mothballed Duane Arnold nuclear plant in Iowa.
Ketchum stays as CEO of the combined firm, while Dominion CEO Robert Blue takes over the regulated utilities business and gets a board seat.
For investors, the math is plain: AI is the demand story, and power is the bottleneck. Owning the largest regulated utility in the world becomes a much bigger deal when the buyers are the hyperscalers building chip farms.
The AI race is starting to look more like an electricity race. This deal is the biggest bet on that idea yet.
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