DAYTONA BEACH, FL – FEBRUARY 24: Kaz Grala, driver of the #33 KiklosGreekExtraVirginOliveOil Chevrolet, celebrates in Victory Lane after winning the NASCAR Camping World Truck Series NextEra Energy Resources 250 at Daytona International Speedway on February 24, 2017 in Daytona Beach, Florida. (Photo by Jonathan Ferrey/Getty Images)
Getty Images
How and how much energy we’ll consume tomorrow and beyond is to some degree unknown. If readers are doubtful, they need only travel back in time to January 27, 2025.
$1 trillion in market capitalization was knocked off top U.S. technology companies like Nvidia that day. The catalyst was DeepSeek, and the release of its R-1 AI.
The Hangzhou based research lab revealed through its rollout that it could train top-shelf AIs for a fraction of the cost previously required, and with chips that were far from top-of-the-line. Nvidia shed $600 billion in market cap that day.
Less noted at the time was that electricity companies similarly endured substantial share-price declines. The DeepSeek-R1 revealed not just impressive promise as an AI, but with reduced electricity usage.
Since then, technology and electricity stocks have recovered, but the big correction is a reminder that energy outlook changes by the day simply because commerce does. This explains why NextEra’s planned acquisition of Dominion Energy is so important. It’s through combinations like this one that the future of energy consumption can be sorted out more effectively.
It’s said that corporations are AIs themselves in consideration of the expanded productivity and thought achieved through the aggregation of machines and minds, which speaks to the value of NextEra and Dominion working together. Instead of productivity-sapping duplication, two enormous utilities presently serving Florida, the Carolinas and Virginia will combine to expand their capabilities by increasing the machine, manpower and thought formerly compromised by two businesses working apart.
This becomes crucial given the perception as you read this that American utilities aren’t where they need to be when it comes to producing more energy. As NextEra CEO John Ketchum explained it, “Electricity demand is rising faster than is has in decades.” Which is the point about the importance of work divided via mergers.
It recalls the Henry Ford’s assembly lines, in the early parts of the 20th century, and the pin factory Adam Smith visited in the late 18th century. The more hands at work together in specialized fashion, exponentially more production.
Ketchum expects much the same from this combination. Precisely because electricity demand is on the rise, it’s necessary that producers of electricity achieve substantially increased productivity enhancements that are most achievable by combining two businesses formerly operating alone. Put another way, with mergers the aim is 2+2=10.
Will this work with NextEra and Dominion? The only way to find out is for politicians and regulators to let the merger sail through without qualifications.
For now, all that’s known or thought to be true is that electricity demand is poised to substantially increase. Which means utilities stateside can either go it alone with hopes of increasing production enough to keep pricing pressures down, or they can combine capacity on the path to more electricity production at prices that will fall.
Implied in the announced merger is that more capital directed toward traditional electricity production combined with efforts to produce new power sources (think solar) will more than make up for the power consumption surge that’s expected. Add to all this that capital outlays frequently unearth new productive leaps heretofore not thought of, and a quick completion of this merger becomes more pressing.
It can’t be said enough that wealth is knowledge, and all that’s thought to be known now is that power requirements in the future will exceed those of today. If so, it’s essential that leading power producers be free to discover and meet the needs of this future however it reveals itself.