Dominion Energy (D), which has agreed to be acquired by NextEra Energy (NEE), faces a lengthy regulatory review in Virginia and possible asset-sale requirements before the deal can close, RBC Capital Markets said Monday in a report.
The Virginia State Corporation Commission is expected to take the full 180-day review period because Dominion's subsidiary, Virginia Electric and Power Company, is the state's dominant utility, giving regulators a large and complex system to evaluate, the report said.
Regulators may push for divestitures tied to the New England Power Pool, RBC said, noting that NextEra owns the Seabrook nuclear plant in New Hampshire and Dominion owns Millstone in Connecticut. Together, the two facilities account for more than 10% of the region's generating capacity, a level that could raise competition concerns, the report said.
RBC raised its price target on Dominion stock to $72 from $66 and reiterated its sector-perform rating.
Price: $68.09, Change: $+0.53, Percent Change: +0.78%