Data center power boom pushes utilities toward dealmaking

NextEra Energy’s planned purchase of Dominion Energy would create a much larger U.S. power company at a moment when artificial intelligence is driving new demand for electricity. The deal matters because the costs of building the grid for that demand can flow through to ordinary utility customers, according to Conor Harrison of the University of South Carolina, writing for The Conversation.

NextEra announced on May 18, 2026, that it would acquire Dominion, and Reuters reported the value at $66.8 billion. The companies said the combination would create the world’s largest regulated electric utility business, while Bloomberg’s image caption described the transaction as the biggest power acquisition ever.

Harrison, an associate professor of economic geography who studies the electricity industry, argued that the merger fits a broader wave of utility dealmaking tied less to household power use than to data centers built for AI systems. He wrote that Wall Street investors and financial firms are helping reshape how U.S. electric utilities seek profits.

Why data centers matter

Dominion serves parts of Virginia, including northern Virginia’s data center corridor, according to Harrison. That area has become central to the deal because data centers require large amounts of electricity and can justify new spending on power plants, wires, transformers and substations.

Harrison wrote that NextEra’s move would add regulated utility operations to a company that has also grown through renewable energy projects in competitive markets. He said the acquisition could help NextEra reduce investor concerns about risk, improve its credit profile and raise capital for additional infrastructure.

The structure of U.S. electricity markets shapes who pays and who profits, Harrison said. In traditionally regulated states, utilities operate as monopolies in assigned territories, and state regulators set customer rates to allow a return on approved infrastructure spending.

Harrison wrote that those allowed returns are generally around 10%. In his example, a utility that builds a $100 million power plant lasting 30 years could recover that cost from customers over time, along with an additional profit approved through rates.

Different routes to profit

Harrison described four main ways investor-owned utilities attract Wall Street: operating monopoly systems, competing in deregulated markets, buying and selling assets or companies, and influencing regulation. He said around 70% of U.S. households buy electricity from private companies, often through subsidiaries of larger holding companies.

In regulated markets, Harrison wrote, utilities usually do not earn profit merely from selling electricity. Their earnings are tied to capital spending approved by regulators, which can give companies a reason to forecast rising demand and seek approval for new equipment.

In deregulated markets, Harrison said utilities and power-plant owners can profit by generating electricity cheaply and selling it at higher prices, though they also face losses when prices fall. He wrote that NextEra has stood out by building large renewable projects and using long-term contracts that reduce exposure to market swings.

Harrison also pointed to lobbying and regulatory approvals as central to utility profits. He cited reporting that NextEra has been politically active in Florida, and said mergers of this size depend on persuading policymakers that customers will not be harmed.

The question for regulators is whether growth built around AI-related power demand will leave residential customers better served or paying more. Harrison wrote that utilities are seeking scale and influence as the data center buildout continues, while the benefits for households remain uncertain.

This story draws on original reporting from Fortune.