NextEra Energy's Texas Mega-Project Takes Shape as Washington Scrutiny of Dominion Deal Intensifies

NextEra advances 20.5 GW of gas and storage projects for data centers while its $67 billion Dominion merger faces growing regulatory scrutiny.

NextEra Energy is pressing ahead with an aggressive build-out of power generation aimed squarely at the booming data-center economy, even as political resistance to its proposed tie-up with Dominion Energy begins to harden in the US capital.

Speaking Thursday at a Wolfe Research industry conference, CEO John Ketchum laid out a pipeline of state-level projects totaling 20.5 gigawatts — 18 gigawatts of gas-fired generation and 2 gigawatts of storage. Capital commitments of USD 3.3 billion are already locked in for the first 10 gigawatts of that slate. Shares closed Thursday at EUR 67.92, up 1.6% on the day.

Kentucky and Texas Anchor the Expansion

Two flagship developments sit at the heart of the strategy. In Kentucky, NextEra plans to convert a former US Department of Energy uranium enrichment site into the Paducah American Energy Hub. The campus is designed to host an AI and high-performance computing data-center complex drawing 1.8 gigawatts, to be developed and operated by Brookfield. NextEra would add 2 gigawatts of gas-fired capacity alongside battery storage of up to 2.6 gigawatts, with surplus power flowing to the public grid. Early work at the site could begin in 2028, with major construction slated for completion by 2032.

Further south, NextEra Energy Resources — working with Related Companies and the Lewis Energy Group — was selected by the US Department of Commerce and the South Korean government for Project Star in Encinal, Texas. The energy campus carries an investment volume exceeding USD 22 billion and calls for 6.47 gigawatts of gas-fired capacity, primarily serving a private data-center campus with a 5-gigawatt load. First units could come online from 2029, subject to regulatory approvals.

In Florida, subsidiary Florida Power & Light raised its forecast for large-load growth in its home market from 6 to 8 gigawatts and signaled a contract with a major data center before the end of 2026.

A Merger Under the Microscope

The expansion narrative is unfolding against a far less settled backdrop: NextEra's USD 67 billion combination with Dominion Energy. Shareholders of both companies approved the deal roughly three weeks ago, yet the stock has slipped 3.8% since that vote as attention shifts entirely to antitrust and energy regulators at the federal and state levels. Completion is targeted for the second half of 2027.

Opposition is organizing. Fourteen US lawmakers sent a letter to the Federal Energy Regulatory Commission on Thursday voicing concerns that the merger could weaken competition and drive up prices for end consumers. The transaction still requires regulatory clearances and customary closing conditions, and any material objections or onerous remedies could erode its economic appeal.

The timeline itself is a factor. Nearly a year of review absorbs significant management bandwidth, and each step in the approval process will shape how the market prices the combined company's future earnings power.

Analyst Adjustments and Technical Picture

Scotiabank weighed in Wednesday, trimming its price target to USD 99.00 from USD 110.00 while keeping an Outperform rating — a signal that the bank still sees upside despite the reduced ambition. The stock trades at EUR 68.02, about 9.7% below its 200-day moving average of EUR 75.32, and sits 3.0% above its 52-week low.

That muted price action reflects investor patience wearing thin. Until regulators provide concrete signals, the market appears unwilling to bake in the long-term synergies of the Dominion combination.

What Could Tip the Balance

A clean approval would open a clear upside path. Pairing with Dominion would entrench NextEra's position in the US utility sector and broaden its base of regulated earnings, while projects like the Texas campus — backed by international partners and government bodies — underscore the strategic weight of the 6.47 gigawatts on offer. If management can demonstrate that large-scale projects remain financeable and deliverable on schedule, the valuation discount could narrow.

The risks run in the opposite direction. Delays in construction or tighter financing conditions for infrastructure could weigh on returns, and a prolonged standstill into the second half of 2027 risks leaving those discounts in place. The next tangible catalyst is progress on official filings and comments in the regulatory review — only credible signals from the authorities will clarify whether the target timeline holds.