This $66.8 billion utility merger is really about data centers

On May 18, 2026, NextEra Energy announced it would buy Dominion Energy for $66.8 billion. The deal would create the largest electric utility in the United States, according to The Conversation.

The driver is not you. The merger is not based on an increase in residential electricity demand, writes David McCabe, a scholar of the electricity industry and author of the book “Brokers of Power.” It is based on rising demand for power to feed artificial-intelligence data centers, and a desire to increase corporate profit.

That distinction is the whole story. A merger built around data-center demand and shareholder returns still reaches the household that never asked for either, because of how utilities are structured to make money. Around 70% of U.S. households get electricity from private companies whose main goal is to make money for their shareholders, according to a figure The Conversation cites from the Edison Electric Institute. Here is how those profit incentives shape your rate, why the four mechanisms behind them matter, and what a resident can do about it.

Who owns your power, and what they want

Start with the ownership map, because it determines the incentive.

In every state, the companies that deliver electricity over the wires are regulated monopolies with fixed service areas. But where the power comes from varies. Many cities get theirs from municipally owned utilities. Many rural areas get theirs from membership cooperatives, nonprofits whose goal is reliable, affordable power for their customers, McCabe writes.

The majority do not. Around 70% of U.S. households get their electricity from private companies, most controlled by large holding companies. Customers know NextEra through its subsidiary Florida Power and Light. They know Dominion through local subsidiaries in Virginia, North Carolina, South Carolina, and Utah. These companies’ main goal, McCabe writes, is to make money for their shareholders.

That goal is not hidden or improper. It is the design. But it means the force shaping your rate is not primarily the desire to improve service for the rate-paying public. It is the preference of stock-market investors and Wall Street firms for utilities that have mastered four ways of making money.

The four ways utilities make money

McCabe’s research identifies four overlapping profit mechanisms that investors reward. Each one reaches the household differently.

One: the monopoly infrastructure markup. In 28 states, electricity markets are traditionally regulated. The utility is a monopoly that owns everything from the generators and wires to the meter on your house. Customers cannot choose their provider, and a state regulator sets the price.

Here is the mechanism that matters most. In these markets, utilities generally are not allowed to profit on selling electricity. They profit on their investments in infrastructure, at a margin generally around 10%, McCabe writes. Build a $100 million power plant expected to last 30 years, and the utility can add that cost plus an additional $10 million, its 10% profit, to customer bills over three decades.

That structure creates a specific incentive. Utilities have a financial reason to predict that electricity demand will rise faster than it actually does, McCabe writes, and to use those predictions to justify overspending on new wires, transformers, and substations. The ratepayers pick up the tab, and the company earns its 10%, even if the new equipment ends up being unnecessary. Profit rises with spending, not with efficiency.

Two: deregulated market timing. The other 22 states are deregulated. Profits are not capped, but neither are losses. Companies that own power plants compete to sell electricity on a wholesale market, and prices swing through cycles of rapid demand growth and collapse. This volatility attracts investors comfortable with risk, including private-equity firms that buy in with borrowed money, McCabe writes. Most utilities that tried to time these markets failed. NextEra succeeded, by developing large renewable projects under long-term contracts that mimic the steady returns of a regulated market.

Three: mergers and acquisitions. This is what the Dominion deal is. NextEra’s success in deregulated markets introduced more risk than its investors want to carry, McCabe writes. Buying a regulated company like Dominion, which holds a monopoly over the electricity in northern Virginia’s “data center alley”, is meant to rebalance that risk, improve NextEra’s credit rating, and help it raise money to build the next round of profit-generating infrastructure for the data-center boom.

Four: dominating the regulatory arena. For the other three to work, a utility must win regulators’ approval for rate increases, get lawmakers to raise its guaranteed profit margins, and secure merger approvals. NextEra is practiced at this. In Florida, the company famously employed one lobbyist for every two legislators, McCabe writes. The regulatory arena is where a rate increase becomes real, and it is the arena where the public has the least visibility.

Why the data-center detail is the key fact

The merger’s stated driver reframes everything a household should understand about it.

Residential electricity demand has been essentially flat for two decades. Efficiency gains in appliances, light bulbs, and cars offset most population growth. The surge now reshaping the industry comes from AI data centers, and Dominion’s territory in northern Virginia is the densest concentration of them in the country.

Here is why that matters for your bill. Under the monopoly infrastructure markup, a utility earns its 10% on the plants and lines it builds, including the ones built to serve data centers. Without rules that assign those costs strictly to the data centers that require them, the construction enters the shared rate base, and residential customers can absorb part of the return through higher monthly rates. The demand is corporate. The billing pool is everyone. A merger that positions NextEra to build more data-center infrastructure is, under the current profit structure, a merger that expands the base on which ratepayers pay a guaranteed return. The crude price sets the floor under all of it, and oil went from $66 to $101 a barrel after the Strait of Hormuz closed.

Whether bigger is better for residential customers, McCabe writes, is a separate question entirely from whether it is better for shareholders.

Why your electric bill is a health issue

Building biology studies how the built environment affects human health. Its first principle is source control: reduce a harm where it originates rather than manage the damage after it spreads. An electric rate is set upstream of your home, but its consequences land inside it, and the harm travels along three measurable pathways.

Heat. When bills climb, households ration air conditioning. Skipping cooling in extreme heat is a hazard, not a preference. Heat-related illness rises fastest among older adults, infants, and people with chronic conditions. The danger peaks at night. High overnight temperatures are particularly dangerous, health experts say, because there is no time for the body’s core temperature to cool down and recover from daytime heat. Supply is shifting under those deals, because solar projects are shutting down and fossil plants are filling the gap.

Food. A household budget is fixed. When utility costs rise, families cut spending on fresh, nutritious food to keep the lights and cooling on, a trade-off that falls hardest on lower-income households, who spend the largest share of their budgets on energy.

Stress. Chronic worry over bills raises the body’s stress response, disrupts sleep, and is linked to higher rates of anxiety and depression. Energy insecurity is a recognized burden in its own right.

The through-line: a decision made in a boardroom and a rate case, about a merger driven by data centers and shareholder returns, determines who absorbs the heat risk, the food trade-offs, and the stress that a higher bill produces.

What you can do

You cannot block a $66.8 billion merger from your living room. You can enter the arena where your rate is actually decided, and the first step is knowing which arena that is.

Find out if your state is regulated or deregulated

In the 28 regulated states, you cannot switch providers, and the rate case is your only lever. In the 22 deregulated states, you can compare and change providers. Your state public utility commission’s website states which system you are in.

Participate in rate cases

When a utility asks regulators to approve a rate increase tied to new infrastructure, that filing is public and open for comment. Ask directly whether the cost of serving data centers is assigned to the data centers or spread to ratepayers. This is the proceeding where the 10% markup gets applied.

Contact your public utility commission

The commission approves rate increases, merger terms, and guaranteed profit margins. Comment on the NextEra-Dominion merger if you are a Dominion customer, and ask what protections exist against cost-shifting from data-center buildout.

Compare providers if you are in a deregulated state. In the 14 states where a middleman company competes for customers, you can choose a cheaper or cleaner plan. Read the contract terms, variable rates can spike.

Lower your own baseline. Weatherstripping, air sealing, a programmable thermostat, and clean HVAC filters cut the energy your home uses, shrinking the bill a rate increase would multiply. Where you can afford it, solar or battery storage shifts part of your demand off the utility entirely.

Never ration cooling in extreme heat. If a bill forces the choice, cool a single room rather than shutting off entirely, and check whether you qualify for the Low Income Home Energy Assistance Program (LIHEAP).

NextEra’s purchase of Dominion would create the largest electric utility in the country, built around data-center demand and shareholder profit rather than the needs of the homes that pay the bills. The 10% guaranteed return that rewards infrastructure spending does not distinguish between a plant your neighborhood needs and one it does not. The place to make that distinction is the rate case, and it is open to you. The bill lands on households already stretched: 1 in 3 struggled to pay an energy bill last year.