Washington, D.C. — As NextEra Energy pursues its $67 billion proposed acquisition of Dominion Energy, the American Economic Liberties Project released a new analysis arguing that Americans are being sold a massive utility monopoly on the promise of AI demand that may never materialize. The deal would create what the companies describe as the largest utility in the nation, with 10 million customer accounts and 110 gigawatts of generation, locking customers who have no ability to switch providers into decades of guaranteed-return spending on infrastructure that may not be needed. 

While NextEra and Dominion frame the merger as a response to AI demand, the underlying driver is a regulatory model that rewards utilities for spending money regardless of need. The bigger the utility, the bigger the guaranteed profit. 

“NextEra and Dominion are selling regulators on a vision of permanent AI-driven demand growth that may never arrive, or stick,” said Marissa Paslick Gillett, Senior Fellow at American Economic Liberties Project and former Chair of the Connecticut Public Utilities Regulatory Authority. “But the infrastructure costs necessary to support their vision will be locked in for decades. Customers who have no ability to choose another provider will pay for years of capital expansion and rate hikes, for buildout that is incentivized by the broken utility business model.” 

“This is a raw deal for customers,” Gillett added. “National and state regulators should take a hard look at whether this level of consolidation and risk to ratepayers is truly in the public interest, and act accordingly.”

NextEra and Dominion have promised immediate affordability benefits via post-merger temporary customer bill credits; however, this may simply be offset by future rate increases. Additionally, they have promised expanded charitable giving, but this may be recovered through customer bills and include political spending. Either way customers will pay more in the long run. 

The companies are relying on a tried-and-tested tactic: pursuing endless capital expansion to justify rate increases to regulators. Indeed, NextEra and Dominion together project this merger will lead to 11% annual growth in regulatory capital employed and, with it, future rate hikes. Ratepayers in Virginia, where a hyperscaler data center cluster is already raising regional electricity bills, will bear the brunt of the deal.

This should come as no surprise. At NextEra’s Florida utility, over 27% of a customer’s electric bill goes toward utility profits and shareholder returns, making it the second highest such rate in the country.

NextEra-Dominion would fall into a long history of utility mergers that shift value from customers to shareholders while increasing market concentration. The new company would wield outsized power over entire regions, especially in the Mid-Atlantic, as well as in New England, where it would control the entire nuclear energy sector — 12% of the region’s installed generating capacity.

The merger would further concentrate power into two companies that have each spent millions on lobbying and political candidates. NextEra’s record at its Florida utility is particularly suspect, marred by claims of political meddling, opaque funding networks, surveilling journalists, and efforts to reshape regulation in the company’s favor — including political misconduct claims that led to a class-action lawsuit in Florida that they recently agreed to pay $150 million to settle.

These findings reiterate the importance of a thorough merger review by regulators at the Federal Energy Regulatory Commission, Nuclear Regulatory Commission, and state utility commissions across Virginia, North Carolina and South Carolina. NextEra has a long track record of failed acquisition attempts, and, with a thorough and just review, regulators should make sure this proposal is added to the list.

Read the full analysis here.

Learn more about Economic Liberties here.