EL7 Research · Energy and Utilities
6 October 2026 · Prices through the close on 5 October
Power stocks decoupled from NVIDIA and aligned with bonds: what do the Emera and Google deals reveal?
On the same morning, Emera and Canadian Utilities agreed to a merger with a combined enterprise value of 72 billion Canadian dollars, and Google signed a twenty-year contract for 890 megawatts from Constellation reactors. We read the original documents and found no mention of “data centres”, then measured using EL7 data how the market came to price power stocks on interest rates rather than artificial intelligence.
72
Billion Canadian dollars in combined enterprise value for Emera and Canadian Utilities
890
New megawatts from uprating 11 existing reactors for Google
5.31%
Ten-year Treasury yield on 5 October, the highest since May 2002
0.29
Independent power producers’ correlation with NVIDIA in 2026, down from 0.71 in 2025
Executive summary
Two major deals in North America’s power sector were announced on the morning of 6 October 2026. The first is a merger between two equal partners (Merger of Equals), Emera and Canadian Utilities, with a combined enterprise value (Enterprise Value) of approximately 72 billion dollars, representing equity market value plus net debt and preferred shares. The companies describe it as the largest merger in history between two Canadian companies. The second is a power purchase agreement (Power Purchase Agreement (PPA)), a contract to supply electricity, lasting 20 years between Google and Constellation Energy, adding 890 megawatts of new capacity by uprating 11 existing nuclear reactors. A megawatt (MW) measures capacity: the rate of energy flow at a given moment. Headlines presented the deals as a new chapter in the race to supply artificial intelligence with electricity.
We read the original documents, then used the EL7 database to measure how the market prices these stocks today. Three conclusions emerged:
- The documents themselves do not mention “data centres” even once. Neither the Emera and Canadian Utilities announcement, nor Emera’s Q2 report, nor the Google and Constellation announcement. The documents refer to “electrification”, “large-load customers (Large Load)” and “digital infrastructure”. When artificial intelligence appears in Google’s announcement, it concerns tools Constellation will use to operate its plants, rather than electricity demand.
- The Canadian merger is a balance-sheet deal before it is a demand deal. Emera alone plans capital expenditure (Capital Expenditure (Capex)), spending on building and developing assets, of 20.4 billion Canadian dollars between 2026 and 2030. Its interest expense rose 8.3% in the first half of 2026 and now amounts to 42% of operating income (Operating Income), profit from core operations before interest and taxes. The merged entity increases planned spending to 32 billion while expecting to retain an investment-grade rating (Investment Grade), a credit rating indicating a good ability to meet financial obligations.
- The market has stopped treating power companies as artificial intelligence stocks. The correlation coefficient (Correlation Coefficient), a measure of how closely returns move together, between the daily returns of a basket of independent power producers (Independent Power Producers (IPPs)), companies selling electricity without a regulator-guaranteed return, and NVIDIA fell from 0.71 in 2025 to 0.29 in 2026. Their correlation with changes in the ten-year Treasury yield reversed from +0.21 to −0.29, meaning they now fall when yields rise, as traditional utilities do. The yield closed at 5.31% on 5 October, its highest close since May 2002. Since the start of the year, Constellation shares have fallen 24.2% and NRG 39.2%, while the S&P 500 has risen 13.6% and NVIDIA 28.1%.
The conclusion is that companies are acting as AI infrastructure: spending, merging and signing twenty-year contracts. But the market is again pricing their shares on an older factor: the cost of financing.
