NextEra Energy announced an all-stock agreement to acquire Dominion Energy for $67 billion on May 18, 2026, consolidating 10 million utility customers across Florida, Virginia, North Carolina, and South Carolina. The transaction lands three months before major hyperscaler RFPs close and two fiscal quarters into the Federal Energy Regulatory Commission's grid capacity review.

The combined entity controls regulated distribution in Northern Virginia—where 47% of US data center inventory sits—and Florida's I-4 corridor, where Microsoft and Meta filed preliminary interconnection requests totaling 8.2 gigawatts in Q1 2026. Dominion operates 31,000 megawatts of generation capacity. NextEra brings 28,000 megawatts and the largest renewables development pipeline in North America. Together they can bid utility-scale power purchase agreements without merchant exposure, a structural advantage as Alphabet, Amazon, and Microsoft shift from spot markets to 15-year fixed-price contracts.

The deal structure matters. All-stock terms mean NextEra avoids the debt markets entirely while Dominion shareholders inherit NextEra's regulated earnings base—$8.6 billion EBITDA in 2025 versus Dominion's $6.1 billion. NextEra's management guided to 6-8% annual rate base growth through 2030 in their April earnings call, a figure that assumes incremental grid build-out but not the AI load surge now underway. Dominion separately disclosed $14 billion in deferred transmission investments contingent on demand visibility. That visibility arrived. The combined company can now execute both programs under a single regulatory framework and spread engineering resources across four state commissions instead of managing separate dockets.

Utility M&A historically trades at 1.1-1.3x book value. This deal implies 1.47x Dominion's book, which prices in the grid constraint premium. Northern Virginia substation capacity is spoken for through Q3 2027. Florida's load growth—previously 1.2% annually—jumped to 4.8% in 2025 as Nvidia and Oracle activated new clusters. The scarcity is not generation. It is permitted interconnection and distribution infrastructure, both of which require state commission approval and multi-year lead times. NextEra now controls the incumbent utility in the two densest AI build-out regions and can pre-position capital without merchant risk.

Allocators should watch the Virginia State Corporation Commission hearing scheduled for Q4 2026, where the combined entity will file its first integrated resource plan. That filing will reveal the actual capex schedule and whether NextEra can layer renewable capacity into Dominion's legacy coal retirement without rate shock. Separately, FERC's final transmission planning rule—due September 2026—will clarify cost allocation for interregional projects. If the rule favors incumbent utilities, NextEra's expanded footprint becomes a structural moat. If it opens transmission to competitive bidding, the Dominion integration becomes more expensive.

The deal closes in Q2 2027, subject to state and federal approvals. NextEra management has already scheduled roadshow meetings with the four state commissions. No regulatory opposition has surfaced yet, but the Virginia Attorney General's office has opened a formal review, standard procedure for transactions above $5 billion. The timeline assumes FERC approval within 180 days of filing, which NextEra submitted May 19, 2026. The company expects to file state applications by June 30, 2026. Dominion's existing $32 billion debt stack remains in place and will be refinanced across the combined entity's balance sheet, lowering the blended cost of capital by an estimated 40 basis points according to NextEra's investor presentation.

NextEra paid 1.47x book for infrastructure that cannot be replicated on any relevant timeline. The company now owns the only utility platform capable of absorbing 10+ gigawatts of AI load without merchant exposure, and it did so before the hyperscalers finalized their fourth-quarter power auctions.