Black Hills to Power Google’s Wyoming Data Center with $1.8 Billion Investment

Black Hills Corp. has finalized agreements to supply energy for Google’s planned data center in Cheyenne, Wyoming. The contracts, effective from September 30, 2026, will run through 2048 and cover up to 590 MW of grid-connected service, along with managing approximately 2.1 GW of third-party resources via a private microgrid. Energy services are set to commence in late 2027, with peak demand expected by 2030. Black Hills plans to invest $1.8 billion between 2027 and 2029 to expand its natural gas generation capacity by 564 MW at the Cheyenne Prairie Generating Station.

The project is anticipated to generate approximately $150 million in net income by 2030 and around $2.4 billion in unlevered free cash flow through 2048, excluding debt financing effects. The agreements include provisions for cost pass-through, full recovery of generation investments, early termination safeguards, and collateral requirements to protect against financial risks. Additionally, Black Hills expects to reimburse $399 million in refundable advances from Google by June 30, 2027, which were provided for long-lead equipment.

While the project holds significant financial potential, it also involves substantial upfront investments and forward-looking financial commitments. The company is still evaluating its financing mix, which may include debt, to support the generation expansion. The project has received necessary permits, including a substation certificate and an air quality permit, and further transmission investments are planned to support the data center and other regional opportunities.