Black Hills has announced plans to invest $1.8bn from 2027 to 2029 to construct new natural-gas fired power generation capacity aimed at supporting a planned Google data centre in Cheyenne, Wyoming.
The US-based energy company stated that it has signed definitive agreements, effective from 30 September 2026 through to 2048, with Google to supply energy for the proposed facility.
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Under the new arrangements, Black Hills will deliver up to 590MW of grid-connected energy to the Google data centre through a mix of company-owned generation and market energy.
In addition, Black Hills will oversee the output of approximately 2.1GW of third-party contracted resources in Wyoming using a privately managed microgrid under its Large Power Contract Service (LPCS) tariff.
The agreements include both a LPCS Agreement and a Generation Facilities Agreement, and provide for the delivery of energy starting in late 2027, with output expected to reach the data centre’s peak load by 2030.
Black Hills intends to own and operate 564MW (nameplate capacity) of new natural gas generation at its Cheyenne Prairie Generating Station through a non-regulated affiliate.
The remaining 26MW required would be supplied via market energy purchases and retail utility service under Black Hills’ existing tariff.
To support the project, Black Hills expects to begin earning returns on the generation investment once construction starts in 2027.
Revenue from management fees related to microgrid operation is set to commence in late 2027 under a ramp schedule set out in the power contract.
The project is forecast to generate approximately $150m of net income in 2030, with ongoing management fees and returns continuing until full depreciation of the investment in 2048.
The company projects around $2.4bn in unlevered free cash flow over the life of the project, net of the $1.8bn of capital required for generation.
Black Hills president and CEO Linn Evans said: “We are pleased to support Google’s planned investment in Wyoming while remaining firmly committed to providing safe, reliable and cost-effective service to every customer.
“The agreements demonstrate how innovative energy solutions can support economic growth while ensuring existing customers are protected. We are excited that this project will create jobs, strengthen regional infrastructure and contribute to Wyoming’s long-term economic development.”
Financing for the generation buildout is expected to come from project cash flow, debt and other alternatives.
Black Hills reported that Google has provided $399m in refundable advances for the procurement of long-lead equipment, with reimbursement expected by 30 June 2027.
