2026-10-08
- On 6 October 2026 Black Hills announced agreements to serve up to 590 MW to Google’s data center in Cheyenne, Wyoming, effective 30 September.
- It will build 564 MW (nameplate) of new natural gas generation at the Cheyenne Prairie Generating Station site, with about $1.8 billion invested from 2027 to 2029.
- Black Hills will manage about 2.1 GW of third-party contracted resources through a private microgrid; the total resource mix is 2.7 GW including reserve margins.
- The terms run through 2048, with service starting in late 2027 and reaching peak load in 2030.
- Google provided $399 million in refundable advances for long-lead equipment.
US utility Black Hills Corporation announced definitive agreements on 6 October 2026 to supply power to Google’s data center in Cheyenne, Wyoming. The agreements took effect on 30 September 2026 and run through 2048, according to the company.
Under the agreements Black Hills will provide up to 590 MW of grid-connected power to the Google facility and invest about $1.8 billion to build 564 MW (nameplate) of natural gas generation at the Cheyenne Prairie Generating Station (CPGS) site. The remaining 26 MW will come from market purchases and retail utility service.
Black Hills will also manage about 2.1 GW of third-party contracted resources in Wyoming through a privately operated microgrid. CEO Linn Evans said Google bears all costs associated with serving the planned data center throughout the life of the project.
The project combines new generation with microgrid management aimed at data center demand. The generation is to be owned and operated by a non-regulated affiliate, with 564 MW of new natural gas capacity at the CPGS site. The material reviewed does not specify the number, model or manufacturer of the turbines.
Service is provided under the Large Power Contract Service (LPCS) tariff, supported by a Large Power Contract Services Agreement (LPCSA) and a Generation Facilities Agreement (GFA). Black Hills earns a return on the generation investment starting when construction begins in 2027, and it also earns microgrid management fees (MGMF) at a negotiated rate tied to a contracted minimum peak load.
Customer protections include cost pass-through, full recovery of the generation investment (stranded asset protection), early termination provisions, and collateral and credit requirements. The company says the structure is designed so that costs are not shifted to existing retail customers. Financing options include project cash flow, debt and other alternatives, with a focus on earnings accretion and maintaining investment-grade credit ratings.
On regulatory status, the Robinson substation CPCN was approved in May 2026 and the CPGS expansion air permit in August. The CPGS industrial siting permit was filed in July and the South Cheyenne Transmission Expansion CPCN in September. A Wyoming transmission expansion CPCN is planned for the fourth quarter of 2026.
The total resource mix is 2.7 GW including reserve margins and excluding transmission expansion. Black Hills will provide up to 590 MW of grid-connected service and manage about 2.1 GW of Wyoming third-party resources through a private microgrid. Of the 590 MW, 564 MW is new natural gas generation (nameplate) and the remaining 26 MW comes from market purchases and retail service.
The investment is about $1.8 billion, spent from 2027 to 2029. Net income is projected at about $150 million in 2030, unlevered free cash flow is about $2.4 billion over the life of the project net of the $1.8 billion capital cost, and the generation assets are fully depreciated by 2048.
Google provided $399 million in refundable advances for long-lead equipment, which Black Hills expects to reimburse by 30 June 2027. The agreements run through 2048.
Timeline
- May 2026: The Robinson substation CPCN was approved.
- June 2026: The Large Customer Transmission Cost Adjustment Mechanism (LCTCAM) was filed.
- July 2026: The CPGS industrial siting permit was filed.
- August 2026: The CPGS expansion air permit was approved.
- September 2026: The South Cheyenne Transmission Expansion CPCN was filed.
- 30 September 2026: The definitive agreements with Google took effect.
- 6 October 2026: Black Hills announced the agreements.
- Fourth quarter 2026: A Wyoming transmission expansion CPCN is planned.
- 2027: Construction of the generation is to begin, and reimbursement of Google’s advances is expected by 30 June.
- Late 2027: Energy delivery and microgrid management fee revenue are to begin.
- 2030: The data center is to reach peak load.
- 2048: The agreements end and the investment is fully depreciated.
Note
- CPCN (Certificate of Public Convenience and Necessity): a certificate issued by a US state regulator authorizing construction of public-service facilities such as transmission or generation.
- Microgrid: a smaller power network that ties generation and load together and can be managed and operated separately from the main grid.