Several mega-deals among U.S. power and utility companies this year signal both the sector’s pivot toward gas and a potential wave of consolidation.
The value of power sector mergers and acquisitions hit $142 billion in 2025, nearly double that of the previous year, data tracked by PwC shows. The surge was mainly driven by large corporate transactions like Constellation’s $29 billion acquisition of Calpine in January and NRG Energy’s $12.5 billion purchase of LS Power, both of which expanded the major companies’ gas portfolios.
The deals are an example of what PwC described as investors doubling down on assets that promise “stable, dispatchable” power to meet surging demand from data centers and digital infrastructure. That trend was also fueled by the GOP’s One Big Beautiful Bill, which directed a quicker phase-down of investment and production credits for solar and wind, but left nuclear and battery storage incentives intact.
The law “complicated renewable project pipelines and financing,” PwC said; in its aftermath, fossil fuels, infrastructure, and grid-reliability assets have attracted greater investor focus. At the same time, renewable energy deals fell sharply, accounting for just 9% of the total in 2025 compared to 23% the previous year.
Dealmaking in the fossil gas, oil, and electricity sector was already on the rise in 2024, according to data tracked by real estate service provider JLL. Gas — particularly pipeline companies — dominated the tie-ups last year, accounting for 60% of all deals. The U.S. power sector, including both generators and distribution companies, followed close behind.
There was a lot of investor confidence in U.S. energy infrastructure in 2025, PwC said. The firm pointed to the $19.5 billion investment that Canada’s pension plan and the private equity giant KKR made in Sempra Infrastructure Partners. The company has assets across LNG exports, gas pipelines, and renewables — including solar, wind, and battery storage.
In May, Blackstone’s infrastructure division also announced an $11.5 billion deal to buy TXNM Energy, the Albuquerque-based utility owner that serves 800,000 customers across New Mexico and Texas.
Consolidation could continue into 2026, PwC said this week, fueled in part by the data center boom. The proposed merger of Black Hills Corp. and NorthWestern Energy Group, for example, is aimed at bolstering both companies’ financial strength and scale so they can compete for more data center customers. NorthWestern Energy’s CEO in August said the combined utility deal would cover about a fifth of the U.S. NorthWestern primarily serves residents of South Dakota, Montana, and Nebraska. Black Hills operates in those states, as well, along with Wyoming, Colorado, Iowa, Kansas, Arkansas.
