Black Hills signs deal to power Google's Cheyenne data center campus through 2048
In brief
- Black Hills signed agreements to power Google's Cheyenne, Wyoming, data center campus through 2048.
- Up to 590 MW of grid power, plus about 2.1 GW managed via microgrid.
- Black Hills plans about $1.8 billion of 2027-2029 capex for gas-fired capacity.
- Google will cover all project expenses and advanced $399 million for long-lead equipment.
What Black Hills is building
Black Hills plans to deliver up to 590 MW of grid-connected power, mostly from new natural gas plants. That's only part of the picture. The utility will also manage around 2.1 GW of additional resources through a microgrid, which brings the combined resource mix to approximately 2.7 GW (per the company's announcement, as reported by Crypto Briefing).
Most of the money goes into gas generation. Black Hills plans to spend about $1.8 billion between 2027 and 2029, funding 564 MW of natural gas-fired capacity at the Cheyenne Prairie Generating Station. Anything the new plant doesn't cover will come from market purchases and retail tariffs.
Service is set to start ramping up in late 2027, and the load's expected to peak in 2030.
Who's paying for it?
Google is, according to the terms. Under the agreements, Google will cover all associated project expenses, a structure that's meant to shield other Black Hills customers from the financial impact. Google has also advanced $399 million so the utility can procure long-lead equipment before construction gets going.
The company's own projections
Black Hills' numbers point to around $150 million in additional net income by 2030. The utility also estimates roughly $2.4 billion in unlevered free cash flow through 2048, net of generation capital expenditures. These are company projections, not booked results, and they stretch across more than two decades of the contract.
The agreement arrives while Black Hills has a pending combination with NorthWestern Energy, a deal aimed at creating a larger regulated utility. The Motley Fool cast the move as a dividend stalwart joining the AI energy boom.
Frequently asked questions
Who pays for the power buildout for Google's Cheyenne data center?
Under the agreements, Google will cover all associated project expenses, which is meant to shield other Black Hills customers from the financial impact. Google also advanced $399 million so Black Hills can procure long-lead equipment.
When will Black Hills start delivering power to the Google campus?
Energy service is set to start ramping up in late 2027, with load expected to peak in 2030. The arrangement between Black Hills and Google runs through 2048.
How much power is involved in the Black Hills and Google deal?
Black Hills plans to deliver up to 590 MW of grid-connected power, mostly from newly built natural gas plants, and manage around 2.1 GW of additional resources through a microgrid. Combined, the resource mix comes to approximately 2.7 GW.
