Sleepwalker's World by Gordon R. Dickson.
I just Googled the names and it was the top result!
To solve Earth's energy demands devices called Core Taps have been developed to extract energy from the Earth's core. The only problem is the power transmissions put everyone to sleep, so the Core Taps only transmit at night while everyone sleeps except for a few immune "zombies" who roam while the world slumbers.
The protagonist Rafe suspects the chairman of the core tap company, Pao Gallot, of exploiting the soporific effect to make himself a de facto dictator of Earth. He also believes Gallot has kidnapped Rafe's friend Ab Leesing.
Rafe finds his way to Ab Leesing's house where he meets Ab's sister Gabrielle (Gaby) and a wolf named Lucas. The wolf talks - Ab set him up with an implant before he disappeared. Rafe, Gaby, and Lucas set off to find and rescue Ab.
The group ends up in the secret headquarters of Shaitan, a grotesque man who claims to be the malevolent mind behind the conspiracy. Shaitan has been manipulating world events and intends to rule the world. Shaitan also claims to be immortal and various other things. Unfortunately for Shaitan his mind control powers don't work on wolves so Lucas kills him.
The scene you remember is:
"Kill me, then, if you think you can," said Shaitan. "I still won't die. My body will rot, but my soul will enter into your soul. Bit by bit, day by day, I'll grow inside you until I take you over, until you become me. Shaitan will come back to life in you, or in any man or woman who kills him. That's why I won't ever die. Whoever kills me, accepts me into him to live forever!"
"That's what you believe, is it?" Rafe laughed so harshly that he saw Gaby, standing now watching in front of the platform, turn strangely pale. Rafe raised his voice. "Lucas!"
"Lucas?" whispered Shaitan, above Rafe's tight-held forearm.
"Lucas!" Rafe shouted again, and the wolf came into the room through the far, dark entrance, where the door still stood ajar. He came slowly, one paw following the other, down the center of the room, his yellow eyes fixed on the platform where Rafe stood with Shaitan. Rafe released the pressure of his forearm and stepped back from the throne.
"This is Lucas," he said.
He backed off until he came to the edge of the platform, and when he felt emptiness below his left boot sole, he stepped down to stand at one side with Gaby. Lucas came forward, his eyes fixed on Shaitan, singing with little growls in his throat, head held low and tail level behind him.
"Lucas has been made immune to broadcast power- all broadcast power," said Rafe. "And he hasn't got a human mind that you can make love and worship you. If he kills you, will you go on living in him, and take him over to live forever?"
Lucas came slowly forward, step by step, singing his growls.
Doggie ..." whispered Shaitan, his child-eyes staring fascinatedly at the four-legged shape approaching. "Good, good doggie ..."
"He's a wolf," said Rafe.
"Wolfie ... Lucas. Good Lucas ..."