Power and Infrastructure

Black Hills Secures $1.8B Power Deal for Google's Cheyenne Data Center

The deal involves Black Hills Corp. signing a power service agreement with Google to support a new data center in Cheyenne, Wyoming. The total investment is $1.8 billion between 2027 and 2029.

Financial Projections

The utility will generate 564 MW of new natural gas capacity to support Google's grid service needs. The total resource mix reaches 2.7 GW, including reserves.

Risks and Challenges

Execution is the obvious risk, as building 564 MW of gas generation and coordinating 3 GW of third-party resources on a fixed schedule is complicated work. The projected $150 million in net income depends on that schedule holding.

Market Implications

The deal is part of the hyperscaler power scramble, with large technology companies competing hard to lock down dedicated power supply. The agreement with Google is not Black Hills' first, with the company having signed a significant power contract with Constellation Energy.

Outlook

Whether Black Hills converts its broader data center plans into additional signed contracts will show whether this deal is the start of a trend or a single, very large win.