Black Hills Corp. on Oct. 6 announced it has signed definitive agreements effective Sept. 30, 2026, with terms through 2048, to serve a planned Google data center to be constructed in Cheyenne, Wyoming.
The negotiated agreements include a Large Power Contract Services Agreement (LPCSA) and a Generation Facilities Agreement (GFA).
The project, exclusive of additional transmission system expansion investments, is anticipated to be served by a total resource mix of 2.7 gigawatts, including reserve margins, and is planned to begin taking energy service in late 2027 and ramp to the project’s peak load in 2030.
Black Hills will provide up to 590 MW of grid-connected energy service through company-owned generation and market energy.
In addition, 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 (LPCS) tariff.
To support the project, Black Hills plans to invest $1.8 billion between 2027 and 2029 to construct 564 MW (nameplate capacity) of company-owned generation.
To provide 590 MW of grid-connected service, Black Hills will construct and own through a non-regulated affiliate 564 MW (nameplate capacity) of new natural gas generation located at the company's existing Cheyenne Prairie Generating Station (CPGS) location. The remaining 26 MW will be supplied through a combination of market energy purchases and retail utility service provided under the company’s applicable industrial tariff.
Black Hills said it expects to finance the $1.8 billion generation investment through a combination of project-generated cash flow, debt, and other financing alternatives, and is evaluating a range of financing options, with a focus on earnings accretion "while maintaining our solid investment-grade credit ratings." It said that "strong cash flow, contractual pass-through of debt costs, cash return on the investment during construction, and a risk-adjusted return on the capital investment provide substantial flexibility in determining the optimal financing mix."
Google has provided Black Hills with $399 million of refundable advances for the procurement of long lead-time equipment under the parties' generation reservation agreement. Black Hills expects to reimburse those advances by June 30, 2027.
"The project is structured to ensure that costs associated with serving the planned data center do not shift to existing retail customers. The agreements provide Black Hills with long-term revenue certainty and include multiple protections for customers and shareholders throughout the 2048 contract term," Black Hills said.
Black Hills said that the announced agreements include the following base retail customer protections, among others:
- Cost pass-through mechanisms: contract structures protect customers from costs associated with the planned data center while protecting returns from inflation, interest rate volatility, and other cost pressures;
- Stranded asset risk protection: the GFA provides for full recovery of all generation capital investment over the contract term, protecting customers against risk of stranded assets;
- Early termination protection: contract provisions safeguard customers and shareholders should the project terminate prior to the end of the agreements’ term; and
- Credit protections: strong collateral and financial assurance requirements back the data center’s long-term commitments.
To further support this project, the company has completed or started regulatory matters, including the Robinson substation Certificate of Public Convenience and Necessity (CPCN) approved in May 2026; Industrial siting permit for CPGS expansion filed in July 2026; and Air quality permit for CPGS expansion approved in August 2026.
Additionally, Black Hills is anticipating additional transmission investment to serve this project and other regional large-load opportunities that provide upside to its current capital plan.
The company is advancing its transmission plans through the following regulatory filings:
- Large Customer Transmission Cost Adjustment Mechanism (LCTCAM) filed in June 2026;
- South Cheyenne Transmission Expansion CPCN filed in September 2026; and
- Wyoming transmission expansion CPCN to be filed in the fourth quarter of 2026.
Based in Rapid City, South Dakota, Black Hills serves 1.37 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming.
