Black Hills Books $1.8 Billion and 564 MW for Google’s Cheyenne Data Center, But Owns None of the 2.1 GW Microgrid

Black Hills Corp. has signed definitive agreements to power Google’s planned data center in Cheyenne, Wyoming. The utility holding company commits $1.8 billion to build 564 MW of new natural gas generation. It will also manage a separate 2.1 GW block of third-party resources it does not own. The agreements took effect September 30, 2026 and run through 2048. Black Hills disclosed them in an 8-K filing on October 6. Energy service starts in late 2027 and ramps to peak load in 2030.

The new gas units go up at the existing Cheyenne Prairie Generating Station between 2027 and 2029. Black Hills will build and own them through a non-regulated affiliate rather than its Wyoming utility. Those 564 MW of nameplate capacity, plus 26 MW of market energy purchases, give Google up to 590 MW of grid-connected energy service.

The larger number sits outside that. Black Hills will manage the output of approximately 2.1 GW of Wyoming-based, third-party contracted resources through a privately managed microgrid under the company’s Large Power Contract Service tariff. The company owns none of that capacity. It collects a microgrid management fee for coordinating grid operations, reliability services and energy dispatch across the portfolio. Black Hills says the project will draw on a total resource mix of about 2.7 GW, including reserve margins and excluding transmission expansion.

Google has already advanced Black Hills $399 million in refundable payments for long lead-time equipment under a generation reservation agreement. Black Hills expects to reimburse that money by June 30, 2027. The utility projects roughly $150 million of net income from the project in 2030 and about $2.4 billion of unlevered free cash flow through 2048, net of the $1.8 billion in capital spending.

“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,” said Linn Evans, president and CEO.

Why It Matters

Read the risk allocation, not the headline figure. Black Hills carries $1.8 billion of capital spending. The generation facilities agreement provides for full recovery of all generation capital investment. The company files that under stranded asset risk protection. Cost pass-through mechanisms, early termination provisions and collateral requirements sit alongside it. On the 2.1 GW microgrid, Black Hills puts up no capital at all and still books fee revenue. Other utilities will copy that structure for large-load deals. Own the firm capacity inside an unregulated affiliate. Contract away the downside. Then charge for dispatch coordination on assets belonging to somebody else.

Critical Perspective

Four regulatory approvals remain outstanding, and one of them has not been filed. Black Hills won a Certificate of Public Convenience and Necessity for the Robinson substation in May 2026. Regulators approved the air quality permit for the Cheyenne Prairie expansion in August 2026. Three filings still wait on a decision: the industrial siting permit from July 2026, the Large Customer Transmission Cost Adjustment Mechanism from June 2026, and the South Cheyenne Transmission Expansion CPCN from September 2026. A fourth CPCN for Wyoming transmission expansion goes in during the fourth quarter of 2026. The company’s own risk language flags conditions precedent and termination rights. Black Hills has run this play before, pairing 200 MWh of Tesla Megapacks with its 420 MW Pueblo gas plant. Cheyenne is already a large-load magnet, where Tallgrass and Mitsubishi Power allocated 1,150 MW of gas turbines to the Cheyenne Power Hub.

There is also a fuel question. Google separately agreed with Constellation Energy to add 890 MW of nuclear capacity through uprates at existing reactors. In Wyoming the same buyer is underwriting a total resource mix of about 2.7 GW on a contract that runs to 2048. Black Hills builds 564 MW of that as natural gas. Power Engineering reports that the project release suggests turbines and fuel cells behind the 2.1 GW third-party block, so the generating mix is not firmly public yet. The economics work for Black Hills shareholders in 2030. The contract runs eighteen years past that.

Sources

• Black Hills Corp., Form 8-K Exhibit 99.1, SEC EDGAR (October 6, 2026)
• Power Engineering, “Black Hills to build 564 MW of new gas, manage 2.1 GW microgrid for Google data center in Wyoming” (October 9, 2026)
• Black Hills Corp. investor relations, “Executes Definitive Agreements to Serve Google’s Planned Data Center in Cheyenne, Wyoming” (October 6, 2026)

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