New England governors join Virginia in

Governor Abigail Spanberger of Virginia has formally intervened to oppose the $67 billion merger between NextEra Energy and Dominion Energy announced in May. The deal would create the world's largest regulated utility.

Spanberger, a Democrat, stated her priorities are protecting ratepayers from bill increases, preserving state power sector jobs, and maintaining Virginia's renewable energy transition. Her intervention grants her the power to serve discovery on the companies as the Virginia State Corporation Commission reviews the case. Republican state lawmakers have also expressed concern, calling for a special session to give regulators more time.

Regional opposition spreads north

Last week, the governors of Connecticut, Maine, Massachusetts, Rhode Island, and Vermont joined the opposition. Via NESCOE, the committee representing state interests in regional electricity matters, they issued a joint statement arguing the merger "would concentrate an unprecedented amount of leverage in NextEra." New Hampshire, the sixth NESCOE member, did not sign the statement.

Maine Governor Janet Mills, in a separate statement, called the merger "ill-advised" and said it would grant one company excessive control over generation and transmission. "This deal may be good for NextEra’s shareholders, but it’s a bad deal for Maine people," she added.

Concerns over assets and past conduct

The opposition stems from several factors. Neither company's regulated utility territory includes New England, but both own major unregulated assets there. NextEra and Dominion own the region's only operating nuclear plants: Seabrook in New Hampshire and Millstone in Connecticut.

A significant concern is NextEra's past efforts to block regional infrastructure. The governors' statement points to a five-year-old fight over the 1.2-gigawatt New England Clean Energy Connect transmission line. In 2021, NextEra intervened in multiple state permitting processes to try to block the project and contributed $20 million to a Maine referendum against it. An ethics commission found the company also covertly funded two additional opposition groups.

"The states’ concern that these companies will act to disrupt and delay infrastructure development is not hypothetical," the NESCOE statement said. It also noted Dominion has used its resources to lobby for out-of-market payments under the threat of retirement, which could impact resource adequacy.

Regulatory pathways and potential outcomes

The companies have filed for approval with the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, and the utility commissions of Virginia, North Carolina, and South Carolina. Virginia's commissioners are appointed by the legislature, not the governor, which David Pomerantz of the Energy and Policy Institute said suggests independence from Spanberger's influence. However, he noted prominent officeholders' opinions likely have an impact.

Julien Dumoulin-Smith of Jefferies investment bank expects the merger to be a "win-win" for NextEra and Virginia, particularly on job creation. He suggested NextEra, facing a cost-of-living crisis in Florida, would be inclined to allocate more employees to a planned second headquarters in Richmond.

The New England governors have no direct control over the merger's outcome. Their statement urges FERC and other regulators to apply "the highest level of scrutiny." Dumoulin-Smith suspects some concerns about concentrated market power could be resolved if Dominion and NextEra submit favorable long-term contracts for power from Millstone and Seabrook. Both plants have contracts with Connecticut utilities expiring in 2029, and a competitive procurement process was already underway before the merger announcement.

Dumoulin-Smith added the merger talks provide a backdrop for Connecticut Governor Ned Lamont to push for a favorable power contract that keeps costs predictable for ratepayers.