NextEra Energy plans $59B annual capex as Dominion deal expands reach

NextEra Energy plans $59 billion in annual capital spending through 2032, betting on surging electricity demand from data centers and AI.

"Scale allows us to buy, build, finance and operate more efficiently so that a utility can meet growing needs at the lowest reasonable cost," John Ketchum, NextEra chairman and chief executive officer, said in regulatory filings.

The company, already one of the world's largest utilities with a $185 billion market capitalization, agreed in May to acquire Dominion Energy for $67 billion. The deal would create the nation's largest regulated electric utility, serving about 10 million customer accounts across Florida, Virginia, North Carolina and South Carolina. The combined company would own or operate more than 110 gigawatts of generating capacity spanning renewables, nuclear, natural gas and battery storage.

NextEra projects the spending will support annual earnings growth of about 9%, up from 8% without the transaction. The company also plans to maintain its decades-long streak of annual dividend increases, targeting roughly 6% annual dividend growth from its current 2.7% yield.

The $59 billion annual capex plan reflects a step change in an industry where electricity demand grew just 10% over the two decades through 2025. Between 2025 and 2045, demand is expected to increase 60%, driven by artificial intelligence, data centers and electric vehicles, according to company projections.

Virginia, where Dominion operates, is home to one of the world's largest data center markets, giving NextEra direct exposure to the fastest-growing segment of electricity consumption. The company's regulated utilities must have capital spending plans approved by government bodies, while its separate contracted renewable energy business sells power at market rates — providing two channels for growth.

As part of the merger terms, NextEra committed $2.25 billion in shareholder-funded bill credits for Dominion customers in Virginia, North Carolina and South Carolina over the first two years after closing. The companies have filed for approval with the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission and state regulators in Virginia, North Carolina and South Carolina. They expect the transaction to close in the second half of 2027.

The capex plan signals that NextEra's management expects AI-driven electricity demand to accelerate well beyond historical trends. Investors will watch regulatory decisions on the Dominion merger and the company's ability to execute on its $59 billion annual investment program.

This article is for informational purposes only and does not constitute investment advice.