One deal ended the comparison

On 18 May, NextEra Energy — owner of Florida Power & Light and the largest US developer of contracted wind, solar and storage — agreed to buy Dominion Energy, the regulated utility whose Virginia territory contains the densest cluster of data centers on earth. The consideration is stock: 0.8138 NextEra shares per Dominion share, plus a one-time cash payment of $360m, creating a business with roughly $420bn of enterprise value. Dominion holders would own about a quarter of the result.

That disposes of any question about which utility the market prefers. Dominion has been in an uptrend for 114 straight sessions since 28 April, the only large utility in that condition on 19 August, when nine peers including Duke, Exelon, Sempra and Xcel were all in confirmed downtrends. But the streak decomposes to a single day. Dominion closed at $62.89 when the run began and $68.04 on Thursday, an advance of 8.2%; the announcement session alone was 9.44%. Everything since has been the arbitrage discount grinding shut — from −6.8% against the exchange ratio on 18 May to −1.9% now.

The regulated side is winning the load, slowly

Dominion's operating business is doing what the thesis says it should. It reported more than 53 GW of data-center capacity in stages of contracting in the second quarter, with 12 GW under signed electric service agreements, up roughly 5 GW since year-end. Revenue rose 19.6% to $4.56bn.

The money has not arrived yet. Operating income fell 2.4%, margin narrowing to 23.5% from 28.8%, and net income fell 55% to $340m — construction of the Coastal Virginia Offshore Wind project, whose cost estimate rose nearly $300m, sits between the load growth and the shareholder. Consensus has Dominion earning $3.59 a share this year and $4.08 by 2028, mid-single-digit growth against double-digit revenue. At 18.97x forward earnings it is priced where a regulated utility with 6-8% rate-base growth normally is.

NextEra is the one being marked down, and not for operating reasons. Second-quarter revenue rose 12.4% to $7.53bn and net income rose 55% to $3.14bn. The Energy Resources backlog reached 35.1 GW after 3.6 GW of additions, and management raised Florida Power & Light's expected large-load connections to 8 GW by 2032 from 6 GW — each gigawatt roughly $2bn of capital earning a regulated return. Guidance for 8%-plus earnings growth through 2035 was reaffirmed in July. The shares fell anyway, and its forward multiple of 21.18x sits above its trailing 19.10x, because consensus adjusted earnings of $4.03 are below trailing reported earnings. The de-rating is compressing a premium, not creating a discount — and it still leaves NextEra dearer than the company it is buying. The gating item is Virginia: the merger applications went to the state corporation commission and four other regulators on 15 July, with closing targeted for the second half of 2027.

The merchant upside is being capped by rule

The purer bet on AI electricity has been the worse one, and the reason is administrative. PJM's capacity auction has now cleared at the federally approved ceiling three delivery years running, most recently at $325/MW-day for 2028/29, procuring 138,318 MW. PJM's independent market monitor calculates that the cap kept $13bn off customer bills and that prices would otherwise have exceeded $500/MW-day. The scarcity is real; the rent from it is being handed to load.

Vistra, an integrated generator and retailer with about 38,700 MW across gas, nuclear, coal and batteries, cleared roughly 10.9 GW in that auction — visibility, at the ceiling price. Its adjusted EBITDA rose 30% to $1.77bn and 2027 guidance was held at $7.4-7.8bn, yet the shares are down 27% over twelve months. It fell 8.15% on 4 August, the session after Texas ordered an audit of data-center interconnections, which management expects to resolve in about two months. Vistra trades at 10.27x trailing enterprise value to EBITDA against 14.74x for Constellation Energy, the nuclear-heavy peer that raised full-year guidance and has risen over the past month while Vistra fell. That gap is what the market pays for reactors without a gas fleet attached.

Rates are the fashionable explanation — the 30-year Treasury touched 5.33% on 18 August, a 19-year high. But a single yield cannot produce one utility rising, nine falling and one merchant generator down a quarter on the year. Ownership of the load is doing the work.

The setup

Where it stands — Dominion trades as a fraction of NextEra; the merchant generators own the demand growth but not its economic rent. Would confirm — Vistra's 2027 adjusted EBITDA guidance holds at $7.4-7.8bn when ERCOT forward curves are next marked. Would invalidate — Dominion's discount to the 0.8138 exchange ratio widening back beyond 5%, signaling doubt the deal closes. Watch next — NextEra and Dominion shareholder votes in early September 2026, then the Virginia commission's merger record. Valuation — NextEra 21.18x forward against 19.10x trailing; Dominion 18.97x forward; Vistra 15.79x forward against 23.37x trailing.