NextEra Energy and Dominion Energy on May 18 announced that they have entered into a definitive agreement to combine in an all-stock transaction.
“The combination will create the world's largest regulated electric utility business, fortified by North America's premier energy infrastructure platform and developer,” they said.
The combined company will be more than 80% regulated, serve approximately 10 million utility customer accounts across Florida, Virginia, North Carolina and South Carolina and own 110 gigawatts of generation across a broad mix of energy sources.
“The combined company will drive affordability in the long term by leveraging scale and operating and capital efficiencies as the company makes smart investments on behalf of its customers to meet growing power demand. Additionally, the combined company is proposing $2.25 billion in bill credits for Dominion Energy's customers in Virginia, North Carolina and South Carolina spread over two years post-close,” they said.
“With growth drivers evenly balanced between regulated and long-term contracted businesses and more than 130 GW of large-load opportunities in its pipeline, the combined company will have a broader opportunity set, more ways to grow and the scale, balance sheet and best-in-class operating, supply chain, construction and technology capabilities to deliver the generation, transmission and grid investments needed to serve customers, support economic growth and cost-effectively meet surging power demand while keeping bills affordable.”
The combined company will operate under the NextEra Energy name and trade on the New York Stock Exchange under the ticker symbol NEE.
It will have dual headquarters in Juno Beach, Florida, and Richmond, Virginia, and Dominion Energy South Carolina's existing operational headquarters in Cayce, South Carolina. Dominion Energy's utility companies will continue to operate as Dominion Energy Virginia, Dominion Energy North Carolina and Dominion Energy South Carolina.
John Ketchum will serve as chairman and CEO of the combined company, and Robert Blue will serve as president and CEO of regulated utilities and as a member of the board of directors. Edward Baine will be president and CEO of Dominion Energy Virginia, Keller Kissam will be president and CEO of Dominion Energy South Carolina and Scott Bores will be president and CEO of Florida Power & Light Company.
Strategic rationale
"The combination brings together two complementary industry-leading companies and four high-quality regulated platforms that have virtually no operational overlap, creating an even stronger customer value proposition, a broader growth platform and a larger, more diversified opportunity set for shareholders," the companies said and listed the following items:
- Approximately 10 million utility customer accounts across four high-growth states with constructive regulatory environments and diversified growth coming from every sector.
- Combination of best-in-class operations and development capabilities with increased scale "creating an unmatched platform to cost-effectively meet the country's need for power. Scale will enable the combined company to buy, build, finance and operate more efficiently, which translates into real savings for customers over time."
- Robust and wide-ranging supply chain with unmatched buying power.
- Industry leader in data and analytics. "Unparalleled data and data analytics capabilities to build the right projects, at the right time, in the right locations using AI to drive efficiencies in development, construction and operations."
- Growth anchored by the nation's largest regulated capital plan. Combined rate base of $138 billion expected to grow at approximately 11% through 2032 "by investing smartly and efficiently for the benefit of customers."
- "Unmatched diversification and leading large-load opportunity. More than 15 ways to grow, anchored by a more than 130-GW large-load pipeline."
- "An industry leader in nearly every category. No. 1 in the world in renewables and battery storage, No. 1 in the U.S. in gas generation, No. 2 in the U.S. in nuclear generation, No. 1 in the U.S. in total generation, generation built, annual CapEx, rate base and market capitalization."
The transaction has been unanimously approved by the boards of directors of both companies.
The transaction is expected to close in 12 to 18 months, subject to customary closing conditions and approvals by the shareholders of NextEra Energy and Dominion Energy, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, approval by the Federal Energy Regulatory Commission under Section 203 of the Federal Power Act and approval by the Nuclear Regulatory Commission.
The companies will also file for review and approval from the Virginia State Corporation Commission, the North Carolina Utilities Commission and the Public Service Commission of South Carolina.
