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Black Hills Corp. has signed power service agreements with Google to support a new data center in Cheyenne, Wyoming. The utility plans to spend $1.8 billion between 2027 and 2029 on new natural gas generation to keep the lights, and the servers, on.
What Black Hills is building
The core of the plan is 564 MW of new natural gas generation capacity. It will be built at the company’s Cheyenne Prairie Generating Station.
That new capacity is designed to support up to 590 MW of grid service for Google. The agreements take effect September 30, 2026.
The owned generation is only part of the picture. Black Hills will also manage 2.1 GW from third-party resources, delivered through a private microgrid.
Add it all up and the total resource mix reaches 2.7 GW, including reserves. The 564 MW of new gas plants Black Hills will own represents about a fifth of that total.
Energy delivery is scheduled to begin in late 2027. The arrangement is expected to reach peak capacity by 2030.
Google pays, Black Hills profits
Google will bear all the associated costs, meaning Black Hills’ other customers should not see added charges tied to the project.
The financial projections are substantial for a company of Black Hills’ size. The utility estimates the agreement will add approximately $150 million in net income by 2030.
Over a much longer horizon, Black Hills projects approximately $2.4 billion in unlevered free cash flow through 2048, after capital expenditures.
Investors liked what they heard. BKH shares rose about 5% in after-hours trading following the announcement.
The hyperscaler power scramble
Large technology companies, often called hyperscalers because of the massive scale of their cloud operations, are competing hard to lock down dedicated power supply, driven by the electricity demands of training and running AI models.
Google has been active on this front. The company has also signed a significant power contract with Constellation Energy.
Black Hills, for its part, is not stopping at one customer. The company’s broader project plans for data centers exceed 3 GW in capacity.
What this means for utilities and investors
Execution is the obvious risk. Building 564 MW of gas generation and coordinating 2.1 GW of third-party resources on a fixed schedule is complicated work, and the projected $150 million in net income depends on that schedule holding.
The long-dated cash flow estimate also deserves some perspective. A projection that runs through 2048 assumes the data center keeps operating and keeps needing this power for more than 20 years.
The key dates to watch are September 30, 2026, when the agreements take effect, and late 2027, when energy delivery is set to begin. Whether Black Hills converts its more than 3 GW of broader data center plans into additional signed contracts will show whether this deal is the start of a trend or a single, very large win.
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.
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