RICHMOND: Virginia governor Abigail Spanberger won’t support NextEra Energy Inc’s US$67bil Dominion Energy Inc takeover without a six-year freeze on residential power rates, raising the bar for a utility mega-deal that’s facing increasing scepticism.
Spanberger also is demanding a tripling of bill credits, commitments to lower energy costs, protection against customer disconnections and an increase in clean energy investments. Her comments were filed with state regulators Monday.
“Any proposed merger involving Virginia’s primary state-regulated utility must benefit families, small businesses, and Virginia’s workforce – not just the shareholders of these multibillion-dollar corporations,” Spanberger said.
The transaction, which would create the nation’s largest utility, is facing opposition from state officials concerned about monopoly power and rising utility bills amid a rapid buildout of data centres.
Earlier this month, Virginia lieutenant governor Ghazala Hashimi voiced opposition to the tie-up, saying it offered no “substantial” protections for ratepayers.
Virginia’s review is a critical hurdle for NextEra’s bid for Dominion, which is domiciled and operates the largest utility in the state.
Dominion also serves one of the world’s greatest concentrations of data centres.
The companies also need approvals from federal regulators and officials in North Carolina and South Carolina to proceed with the deal.
“It highlights the growing concern we are seeing around the country about utility affordability and this appears to be an opportunity for the governor to address those concerns,” said Paul Patterson, an analyst for Glenrock Associates.
Virginia Corp Commission staffers also said on Monday the deal should be denied because it exposes Dominion to additional financial risks from NextEra’s unregulated businesses, and the companies provided insufficient commitments to ensure resources will be available to provide adequate service post-merger.
“As expected in a proceeding of this size and significance, today’s testimony reflects a wide range of viewpoints and interests,” NextEra and Dominion said in a joint statement.
“We are reviewing the filings and will address the issues raised through the Commission’s established process.”
Commission staffers said their concerns would be assuaged if the companies meet several additional commitments, according to a filing.
Those include setting up a separate, independent decision making board for Dominion; establishing a bankruptcy remote entity; and maintaining current utility employee levels in Virginia for 10 years.
In August, Spanberger, a first-term Democrat, said she was “deeply sceptical” about the deal, noting she was focused on issues such as energy affordability, jobs and clean energy goals.
NextEra and Dominion last month offered to extend a US$10-a-month residential bill credit in Virginia to four years from two in a bid to smooth approval.
The companies also said they plan to boost a customer bill assistance programme by US$100mil through 2038, shield customers from costs associated with the arificial intelligence boom, create 1,000 new jobs in the state and build more clean energy and battery storage. — Bloomberg
