Dive Brief:

• A Virginia State Corporation Commission hearing examiner ruled Friday that Dominion Energy and NextEra must release documents they attempted to withhold during the review of the two utilities’ $67 billion merger request.
• Among the documents ordered to be released is a “Robo memo” claimed to detail an investigation into Florida Power & Light’s alleged illegal political activity in that state. James Robo was CEO of NextEra, the parent company of FPL; he retired in 2022.
• The Virginia ruling said the utilities had sufficiently provided information in response to other requests, but the order to release the Robo memo concluded the governance and political structure of the two utilities is relevant to the merger review and can be scrutinized.

Dive Insight:

The motion to compel the documents came from Clean Virginia, a Charlottesville-based consumer advocacy group founded by millionaire Michael Bills to counter Dominion’s influence in Virginia, and the Piedmont Environmental Council, an advocacy group interested in preserving Virginia's countryside. Clean Virginia had asked Dominion Energy and NextEra for detailed information about the history of the Florida companies, including the memo. The questions came up during the case’s discovery phase, when involved parties can ask for information before making arguments during an evidentiary hearing next month.

Attorney Gregory Habeeb, a former state lawmaker in Virginia now with Gentry Locke and representing Clean Virginia, argued on behalf of the group during oral arguments on Sept. 22 that the utilities wanted “their cake, and they want to it eat it, too.”

Habeeb argued that the Robo memo was relevant to the case because the two utilities have touted “the way they manage utilities, the rates that they charge people and the experience they have.”

“But then, when it comes to responding to that or looking to take discovery of that, ‘nope not allowed to ask any questions about that,’” Habeeb said. “If your ruling is those things are not discoverable, then what is also not going to be admissible is everything they want to say about how great NextEra is.” 

Dominion opposed the release of the memo and other documents. Review of political activity needs to occur in the political world,  said Joe Reid, a McGuire Woods attorney who represents the utility.

“What happens on Capitol Square happens on Capitol Square,” Reid said. “One is the political sandbox. One is the regulatory sandbox, and the twix shall not twain, so to speak.”

Ultimately, Chief Hearing Examiner Mathias Roussy ruled that Clean Virginia's “request is reasonably calculated to lead to evidence that could verify or impeach the Petition’s representations regarding the historic managerial fitness of the entities for which the merger is proposed or the Petition’s representations of prospective continuity.”

Roussy cited multiple statements from the utility's petition, including, “We will... continue to work with policymakers and community leaders hand-in-hand, as we have always done, to ensure that [DEV’s] engagement with the broader stakeholder community continues with the same openness, accessibility, and responsiveness that has characterized our approach over the years.”

Brennan Gilmore, executive director of Clean Virginia, said in a statement after the decision came out that “as the ruling put it, a public utility 'and any entity that controls it' is more than the people who keep the lights on, and the responsibilities of its management and board are far broader.”

“How NextEra's leadership responded to serious allegations about Florida Power & Light's use of corporate resources to influence elections and target officials goes directly to how it would govern Dominion,” Gilmore said. 

Dominion did not immediately respond to a request for comment.

The merger, announced in May, has faced pushback in Virginia. The two utilities offered several assurances as part of the deal, including $2.25 billion in bill credits over two years, amounting to a $10-a-month reduction in monthly bills for residential customers in Virginia, North Carolina and South Carolina.

Virginia Gov. Abigail Spanberger, D, intervened in the case, along with the ratepayer representative in the Office of Consumer Counsel within the Virginia Office of the Attorney General. Virginia localities, developers and more have also intervened. The Energy Commission of Virginia held a public meeting Aug. 18 regarding financial considerations of the merger, and community members have held rallies calling for a rejection of the merger. 

Lawmakers have held listening sessions around the state to hear citizens’ concerns, but leadership rejected calls for a special session to extend the 180-day review timeline, or change the Utility Transfers Act, the state law governing the SCC's review of the merger. 

Critics have said the 1940 law never contemplated a merger of this size, which could lead to formation of the largest electric utility in the U.S. But Senate Majority Leader Scott Surovell, D-Fairfax, said in an op-ed that the statute says the SCC must find that the deal “will not impair or jeopardize adequate service to the public at just and reasonable rates” in order to approve it. 

“That ‘will not’ language is not qualified with a reasonableness standard like the General Assembly used in other utility statutes,” Surovell wrote. “Section 56-90 is stronger – it asks the commission to be sure, not merely comfortable, or to approve what is ‘reasonable.’”

In response to pushback, Dominion and NextEra announced new terms that offer bill credits over four years and don’t extend to data centers. And the company made further assurances to build more clean energy and battery storage, at a faster rate, though those assurances don’t detail specifics of how much of each generation type will be developed.

The SCC scheduled three in-person hearings around the state, in addition to accepting phone and written comments, to hear from the public. The evidentiary hearing is scheduled to begin Nov. 17. The deadline for the SCC to make a decision is Jan. 11, two days before the 2027 session of the Virginia General Assembly is set to begin. The utilities said they expect the transaction to close in the second half of 2027.

Along with SCC approval, the utilities must get the OK in North Carolina and South Carolina, and from the Federal Energy Regulatory Commission and the U.S. Department of Justice following an anti-trust review. Congressional lawmakers have asked FERC to closely scrutinize the deal. ISO New England’s Internal Market Monitor submitted comments to FERC stating concerns over potentially consolidating generation in the region under the ownership of the combined company.