Giant NextEra-Dominion merger should be met with ‘caution’ to avoid rate increases, groups warn

Groups including Secure Solar Futures, Public Citizen and Clean Virginia have warned that the merger could ultimately increase energy rates for Virginia residents and businesses if the giant utility focuses solely on large, centralised infrastructure developments – a “significant worst-case scenario” for ratepayers. The groups also said it would “make it very challenging to counter the political influence” of the new entity, which would have more than five times the current net worth of Dominion Energy.

They continued to warn that the merger could run “contrary to the public interest” unless “strong protections” are established for affordability, transparency, competition, and grid modernisation.

Public Citizen is a progressive non-profit consumer advocacy organisation; Clean Virginia is a clean energy advocacy group in Virginia; Secure Solar Futures is a commercial and public solar developer.

“Virginia now stands at a pivotal crossroads,” said Tony Smith, CEO of Secure Solar Futures and president of the Virginia Distributed Solar Alliance. “Rapid growth in data centres, electrification, and advanced manufacturing is putting unprecedented pressure on the PJM grid and on Virginia families already facing rising electricity bills. Multiple analyses have warned that without structural reforms, ratepayers could face escalating costs, reliability risks, and expensive overbuilding of centralised infrastructure.”

Virginia is a focal point for growing electricity demand in the US and the impact it can have on residents and small businesses, particularly from data centre expansions. The state is home to “Data Centre Alley”, part of the Dulles Technology Corridor that includes the highest density of data centres on Earth.

A report by the Virginia Joint Legislative Audit and Review Commission (JLARC) said that data centres are likely to double the state’s energy use in the next decade, adding: “It will be difficult to supply enough energy to keep pace with growing data centre demand, so energy prices are likely to increase for all customers.”

Given the unprecedented size of the NextEra-Dominion merger and the expansive growth plans by huge data centre operators, the groups said that to avoid strains on grid infrastructure and rising utility rates, state lawmakers should “use this moment to explore how a transformed utility model could accelerate grid optimisation” through more implementation of distributed energy resources (DERs), battery energy storage, virtual power plants (VPPs), energy efficiency, demand response, and advanced grid management.

The Federal Energy Regulatory Commission (FERC) has issued an order (order 2222) which facilitates the incorporation of DERs like rooftop solar and energy storage into utility energy markets, and Virginia has also issued directives to consider non-wire flexibility and optimisation measures in future grid plans.

The onus is on lawmakers to “ask hard questions now,” Secure Solar Futures said in a statement, “before irreversible decisions are made.”

“If structured thoughtfully, this merger debate could become more than a corporate transaction,” the groups said in a public statement. “It could become the catalyst for a broader public conversation about how Virginia modernises its grid, protects ratepayers, and builds an energy system designed not simply to expand, but to optimise, adapt, and evolve for the decades ahead.”

Utilities vs DERs

US utilities have not always been favourable to DERs. In California, there have been long-running conflicts between solar industry groups and the California Public Utilities Commission (CPUC), over the perception that the latter has passed laws that restrict the growth of residential and community solar projects and give greater powers to large state utilities.

Back in 2024, PV Tech Premium covered the reactions to a bill which restricted community solar projects in California to the benefit of major utilities, and just last month the CPUC rejected a Net Value Billing Tariff (NVBT) proposal backed by the solar industry, which would have given greater compensation to low and middle-income households for power produced at community solar sites.

This is on top of the controversial reforms to California’s net energy metering (NEM) scheme, with the introduction of NEM 3.0 removing much of the incentive to install rooftop solar capacity. And its virtual net metering (VNEM) scheme for multi-residence properties and small businesses, which was changed in 2023; the California Solar and Storage Association (CALSSA) said that the “only winners” from the change were “big utilities”.

The CPUC has said the changes to the NEM scheme were to incentivise more residential energy storage capacity, partly due to California’s high penetration of rooftop solar which had contributed to the infamous “duck curve” effect, where power prices were very low in the middle of the day and spiked in the mornings and evenings when solar generation was lowest and demand highest.

Announcing the merger, Robert Blue, chair and president of Dominion Energy, said the new company would “deliver the generation, transmission and grid investments our customers and economies need.” The company has also said that after the deal closes, it will offer US$2.25 billion in bill credits to Dominion Energy customers in Virginia, North Carolina and South Carolina for two years.