Richmond-based Dominion Energy, the leading provider of electricity in Hampton Roads, is set to be acquired by Florida-based NextEra Energy to create one of the largest energy infrastructure companies in the world.<\/p>\n
\u201cThis combination brings together two strong operating platforms and creates an even stronger energy partner for Virginia, North Carolina, South Carolina and Florida, with the scale and balance sheet to deliver the generation, transmission and grid investments our customers and economies need,\u201d Dominion Energy CEO Robert Blue said in a Monday release.<\/p>\n
The companies have entered an agreement for a stock transaction, resulting in NextEra owning about 74.5% and Dominion owning 25.5% of the proposed combined company. In a deal valued at roughly $67 billion, NextEra would exchange about eight-tenths of a share for each outstanding share of Dominion, and Dominion shareholders also would receive a one-time cash payment of $360 million at closing. The deal, which the companies aim to complete in 12-18 months, is subject to approvals by shareholders and regulators.<\/p>\n
One of the biggest proposed mergers so far this year comes at a time when consumers are worried about escalating electric bills and pushing back against data centers. The companies share a deep commitment to delivering reliable and affordable energy, Blue said, and told investors in a Monday presentation they are committed to large load customers paying their fair share.<\/p>\n
The acquisition, if approved, would create the third largest company in the country\u2019s energy sector behind Exxon Mobil and Chevron. The companies, in their pitch to shareholders, pointed to power demand being expected to grow six times faster over the next 20 years.\n<\/p>\n
\u201cOur country is at an inflection point. Demand for electricity is increasing unlike anything we\u2019ve seen in generations,\u201d NextEra Chairman, President and CEO John Ketchum said during Monday\u2019s investor conference call. \u201cToday energy infrastructure projects are larger and more complex than ever before. Practically every corner of America needs power solutions, not someday, but right now.\u201d\n<\/p>\n
The combined company\u2019s scale would enable significant buying power to build more efficiently and improve financing with an expected upgrade in Dominion\u2019s credit ratings, according to the presentation. The companies said their combined operation would lead to cost effectively handling increased electric demand for its more than 10 million customers in Virginia, the Carolinas and Florida.<\/p>\n
\u201cThe Dominion Energy name isn\u2019t changing, nor is how we operate locally, serve our customers or engage with the community,\u201d Ketchum said in the announcement. \u201cThe same leaders and the same teams customers know and trust will continue serving Virginia, North Carolina and South Carolina.\u201d<\/p>\n
Dominion Energy updated its website with a Q&A<\/a> for customers that includes assurance that service would continue as normal, bills would not increase and accounts would remain the same. The local utilities would retain their Dominion branding.<\/p>\n The companies also proposed $2.25 billion in bill credits spread over two years after the deal closes for Dominion Energy\u2019s 4.1 million household and business customers in Virginia, North Carolina and South Carolina. That equates to more than $500 per customer.<\/p>\n Dominion\u2019s 15,000 employees would also get job protection for 18 months and compensation and benefits protection for two years after the deal goes through, according to the companies\u2019 investor presentation. To sweeten the deal, the companies said they would also increase charitable giving by $10 million a year for five years in Virginia and the Carolinas.<\/p>\n The companies would maintain dual headquarters in Juno Beach, Florida, and Richmond along with operational headquarters in Cayce, South Carolina. The combined company would operate under the NextEra Energy name, and Blue would serve as a board member and its president and CEO of regulated utilities while Ketchum would lead as CEO and chairman. Edward Baine would remain as president and CEO of Dominion Energy Virginia.<\/p>\n The companies plan to file for review and approval from the Virginia State Corporation Commission, the North Carolina Utilities Commission and the Public Service Commission of South Carolina. The deal is also subject to approval from the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission.<\/p>\n Gov. Abigail Spanberger told reporters Monday that she was still digging into the merger.<\/p>\n \u201cJust on first blush, it certainly marks a pretty significant level of expansion,\u201d she said. \u201cI think there\u2019s certainly some things that I want to learn more about.\u201d<\/p>\n Clean Virginia, a nonprofit that advocates for utility regulation reform, in a news release cautioned handing over control of Virginia\u2019s electric grid and pushed for the State Corporation Commission, the regulatory body that oversees public utilities, to hold robust public hearings.<\/p>\n Clean Virginia Executive Director Brennan Gilmore also pointed to past scandals involving NextEra\u2019s principal subsidiary Florida Power & Light, including allegations of campaign finance violations, media manipulation and surveillance of journalists, as reported by the Orlando Sentinel, the Miami Herald and NPR<\/a>. The company this year settled a related class-action lawsuit accusing it of violating federal securities laws, according to the Florida Trib<\/a>.<\/p>\n \u201cVirginia has spent years fighting to reform a utility monopoly that puts shareholders ahead of customers,\u201d Gilmore said. \u201cWe cannot allow this merger to make that problem larger, more powerful, and harder to fix. The SCC process is the moment Virginia gets to set the terms. If NextEra cannot commit to binding reductions in customer bills and a clean break from its history of political manipulation, this deal should be dead on arrival.\u201d<\/p>\n David Pomerantz, executive director of the Energy and Policy Institute, a nonprofit energy watchdog, told the New York Times<\/a> that the merger would lead to higher electric bills for customers in Virginia: \u201cA megamonopoly of this size, with the kind of money to buy political influence that NextEra will have, will be nearly impossible to regulate.\u201d<\/p>\n The Associated Press, editor Tara Bozick and staff writer Kate Seltzer contributed.<\/p>\n