Black Hills plans $1.8 billion in gas generation for Google's Cheyenne data center
In brief
- Black Hills signed power service agreements with Google for a Cheyenne, Wyoming data center.
- Black Hills plans $1.8 billion in natural gas generation spending between 2027 and 2029.
- Google will bear all associated costs, Black Hills said, sparing other customers added charges.
- Black Hills projects roughly $150 million in added net income by 2030.
- BKH shares rose about 5% after hours, according to Crypto Briefing.
What Black Hills is building
At the center of the plan is 564 MW of new natural gas generation capacity, which Black Hills said it'll build at its Cheyenne Prairie Generating Station. That capacity is designed to support up to 590 MW of grid service for Google.
It's not the whole picture, though. Black Hills said it'll also manage 2.1 GW from third-party resources (delivered through a private microgrid), bringing the total resource mix to 2.7 GW including reserves. The company-owned gas plants make up about a fifth of that total.
Energy delivery is scheduled to begin in late 2027, with peak capacity expected by 2030.
Who pays, and what Black Hills expects to earn
Black Hills said Google will bear all the associated costs, meaning the utility's other customers shouldn't see added charges tied to the project.
The company's own projections are sizable. Black Hills estimates the agreement will add approximately $150 million in net income by 2030, and it projects about $2.4 billion in unlevered free cash flow through 2048, after capital expenditures. Those are company forecasts, not results.
BKH shares rose about 5% in after-hours trading following the announcement, Crypto Briefing reported.
A wider scramble for power
Large technology companies (often called hyperscalers because of the massive scale of their cloud operations) are competing to lock down dedicated power supply as AI models push electricity demand higher, according to Crypto Briefing. Google has also signed a significant power contract with Constellation Energy, the outlet noted. Black Hills' broader project plans for data centers exceed 3 GW in capacity.
Crypto Briefing named execution as the obvious risk. Building 564 MW of gas generation while coordinating 2.1 GW of third-party resources isn't a small job, and the outlet said the $150 million net income projection depends on the build schedule holding.
Frequently asked questions
Will Black Hills' other customers pay for the Google data center power project?
Black Hills said Google will bear all the associated costs. According to the utility, that means its other customers should not see added charges tied to the project.
When will Black Hills start delivering power to Google's Cheyenne data center?
The agreements take effect September 30, 2026, and Black Hills said energy delivery is scheduled to begin in late 2027. The arrangement is expected to reach peak capacity by 2030, with up to 590 MW of grid service for Google.
