Dive Brief:
- NextEra’s planned acquisition of Dominion Energy is “not in the best interest of Virginians,” the state’s lieutenant governor, Ghazala Hashmi, D, said in a report released Tuesday summarizing her findings from a five-city public listening tour.
- The report came ahead of the State Corporation Commission’s first local hearing on the pending merger Wednesday, and is the most formal expression of opposition from Virginia’s executive branch so far. Governor Abigail Spanberger, D, has not taken a definitive position on the deal but said she was “skeptical” of it in an August 17 release announcing she had filed with the SCC as a respondent in the commission’s ongoing review of the merger — a role that would allow her to appeal the SCC’s final order to the Supreme Court of Virginia, if she chose to.
- Neil Nissan, a spokesperson for NextEra, told Utility Dive in an email, “We are disappointed by the lieutenant governor’s decision and respectfully disagree with it.” He added that the merger would “help Virginia build more power here at home, reducing its reliance on expensive imported electricity to meet the Commonwealth’s growing power demand.”
Dive Insight:
NextEra announced its plans to acquire Dominion Energy in an all-stock transaction in May. The deal would create the largest regulated utility in the world, with 10 million customers in four states and a 130-GW large load pipeline.
When they announced the deal, the companies said they expected the transaction to close in 12 to 18 months, subject to regulatory approval.
The lieutenant governor’s listening tour stopped in Loudoun County, Norfolk, Richmond, Charlottesville and Roanoke.
In Loudoun, which is home to a high concentration of data center development, the report said: “Most speakers opposed the acquisition or demanded heightened scrutiny; one commenter expressly supported it based on demand growth, innovation, investment capacity, and economic competitiveness.”
Hashmi wrote in the report that she is concerned the merger would pose a risk to Virginians due to NextEra’s “thousands of individual project entities, many in businesses far riskier than a regulated utility.”
“Thus far NexEra has refused to provide assurances as to limits on future acquisitions or whether the Virginia SCC will have review authority,” the lieutenant governor wrote. “The corporation offers no assurances that it will not place its other ventures ahead of Virginia’s needs.”
In Nissan’s comments, he said, “Dominion Energy Virginia would retain local leadership and remain fully regulated by the Virginia State Corporation Commission. We have also pledged to work with Virginia leaders to protect families and small businesses from paying for infrastructure needed to serve data centers.”
In response to Hashmi’s report, Dominion Energy spokesperson Rayhan Daudani told Utility Dive in an email that the planned Virginia benefits package NextEra and Dominion announced Sept. 14 “expands residential bill relief, strengthens long-term affordability, protects customers from merger costs, expands support for customers experiencing hardship and helps ensure data centers pay their fair share.”
“We are also reaffirming our support for the State Corporation Commission, Governor and General Assembly's efforts to protect residential and small business customers from costs associated with serving data centers,” John Ketchum, chairman, president and CEO of NextEra said in a release about the benefits package.
But in her report, Hashmi expressed concern about NextEra’s plan to lean into serving data center growth in Dominion’s footprint, citing not only the cost but also the potential for stranded assets if projected demand does not materialize, leaving residential customers “paying for even more of the cost of what NextEra builds.”
Spanberger’s release announcing her intervention in the SCC’s review of the merger stated that “by formally intervening in the SCC case, my Administration will be able to directly advocate on behalf of Virginians impacted by what would be the largest utility merger in U.S. history.”
NextEra’s Sept. 14 release noted that it and Dominion had also “submitted additional information regarding this enhanced Virginia benefits package to the SCC” in the form of a motion to update their existing testimony in the case.
Virginia’s Office of the Attorney General responded with its own Sept. 18 filing in the SCC’s docket, arguing that this motion was substantial enough to trigger a new “180-day statutory timeline” for the case.
The attorney general’s office proposed restarting the 180-day merger review timeline from Sept. 14, instead of the existing start date of July 15. Restarting the timeline would require amended notice; set new, later deadlines for intervention, respondent, SCC staff and rebuttal testimony; and postpone the evidentiary hearing, it said.
The SCC has not yet ruled on that motion. The SCC is set to hold its first local hearing on the case Wednesday, in Newport News, followed by a second local hearing scheduled for Friday in Fairfax County. The case’s evidentiary hearing is scheduled to begin Nov. 17.
