5 things SC consumers should know about the possible Dominion Energy merger
In a historic move, Dominion Energy and NextEra Energy announced a possible merger between the two energy giants on Monday, as demand for energy continues to grow.
The $67 billion deal is huge for both companies, as they are some of the nation’s biggest players in energy and stand to become the world’s largest regulated energy utility if the proposed deal goes through. There are still some hoops to jump through.
Leaders of both companies cited rising electricity demand as the main reason for the merger, as modern projects become increasingly complex, such as data centers and Artificial Intelligence.
“Dominion Energy and NextEra Energy share a deep commitment to delivering reliable and affordable energy to the customers and communities we are honored to serve,” said Robert Blue, the president and CEO of Dominion Energy, in a statement. “This combination brings together two strong operating platforms and creates an even stronger energy partner for Virginia, North Carolina, South Carolina and Florida.”
SC consumers may already know about Dominion Energy, which is headquartered in Virginia and serves 3.6 million homes, but you may be unfamiliar with NextEra Energy. Here’s a brief overview of the energy powerhouse:
Who is NextEra Energy?
NextEra Energy is North America’s largest electric power and energy infrastructure company, and is the leading provider of electricity to homes and businesses across the country, its website states. The company leverages all forms of energy across renewables, storage, natural gas and nuclear.
They’re headquartered in Juno Beach, Florida, and are a Fortune 200 company that owns and operates Florida Power & Light Company, America’s largest electric utility, which provides reliable electricity to approximately 6 million homes and businesses across Florida. They have a market cap of $183 billion.
NextEra Energy also owns the largest energy infrastructure development company in the U.S.
Here are five things SC residents should know about the proposed merger between Dominion Energy and NextEra Energy:
5 things to know about the proposed merger
It will take some time before they can merge
Although the transaction has been unanimously approved by the boards and directors of both companies, nothing is set in stone. They have to first get approval from the Federal Energy Regulatory Commission, state utility regulators and 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.
After it’s all said and done, it’s expected to take up to 18 months before both companies can merge.
It would create the world’s largest regulated utility business
If both companies combine, they would serve over 10 million customer accounts, and operations would be more than 80% regulated, supporting an expected 11% annual growth in the total value of the utility’s assets.
The combined companies’ diverse growth platform is expected to boost adjusted earnings per share growth by over 9% through 2032.
That would create the world’s largest regulated electric utility business by market capitalization and one of the world’s largest energy infrastructure companies. Combined, it will have a market cap of $249 billion.
Customers don’t need to do anything
Customers of Dominion Energy shouldn’t expect any rising costs from this transaction, and they don’t have to do anything at this moment or in the coming months.
According to a statement from Dominion Energy, customers can continue to count on the company’s reliable service, dedicated team and familiar ways to interact with them.
Dominion Energy’s support center will continue to operate, where you can find answers to any questions you may have.
Changes for shareholders
NextEra Energy shareholders will own 74.5% of the company while Dominion investors will own 25.5%. They will operate under NextEra’s name and trade on the New York Stock Exchange under the ticker symbol NEE.
Uniting two industry leaders with 238 years of collective experience will continue to increase shareholders’ profits, said John Ketchum, chairman, president and CEO of NextEra Energy, in a statement.
“Shareholders will benefit from a broader regulated growth runway, a larger opportunity set and a more diversified platform,” Ketchum said. “This is a unique situation where we believe one plus one equals three. We are confident that our customers, the communities we serve, our shareholders and our industry-leading teams will all benefit from this combination.”
Additionally, an all-stock transaction is expected to be tax-free to shareholders and immediately accretive at closing to adjusted earnings per share.
There are proposed benefits for customers and consumers
The proposed merger will include $2.25 billion in bill credits for Dominion Energy customers in Virginia, North Carolina and South Carolina, spread over two years after closing.
Additionally, Dominion Energy plans to expand community support through an additional $10 million in annual charitable giving in Virginia, North Carolina, and South Carolina for five years after closing.
The merger will bring about more benefits for customers over time, Dominion Energy said. A combined company with greater buying power can build more efficiently, have lower borrowing costs and implement operational best practices.