Black Hills to Build $1.8 Billion Gas Plant for Google Data Center

Black Hills Corp. is set to invest $1.8 billion between 2027 and 2029 to construct 564 MW of new natural gas generation capacity at its Cheyenne Prairie Generating Station. The project is designed to provide up to 590 MW of grid service to a new Google data center in Cheyenne, Wyoming.

The broader energy arrangement includes managing 2.1 GW of third-party resources through a private microgrid, bringing the total resource mix to 2.7 GW. Energy delivery is slated to commence in late 2027, with the project expected to reach peak capacity by 2030.

Google will cover all costs associated with the project, which Black Hills expects will contribute approximately $150 million in net income by 2030. Over a longer period, the utility projects $2.4 billion in unlevered free cash flow through 2048. Shares of BKH rose about 5% in after-hours trading following the announcement.

The agreements, which took effect September 30, 2026, are part of a wider trend of hyperscalers securing dedicated power supplies to meet the electricity demands of AI models. Black Hills is currently pursuing broader data center project plans that exceed 3 GW in capacity.

Risks for the utility include the complexity of coordinating the construction and third-party resources on a fixed schedule. Future developments to watch include the start of energy delivery in late 2027 and whether Black Hills can secure additional contracts for its remaining data center project plans.