Black Hills will build 564 MW of new gas generation and manage a 2.1 GW microgrid for a Google data center in Wyoming.

Black Hills Corp. is bringing the turbines, and a $1.8 billion investment, to Cheyenne, Wyoming, to serve Google's next big data center.

The South Dakota-based utility holding company would build 564 MW of new natural gas-fired generation while managing about 2.1 GW of third-party resources to serve Google's planned data center load. Black Hills said the project would draw on a total resource mix of about 2.7 GW, including reserve margins and excluding transmission expansion.

The new gas capacity would be built at Black Hills' existing Cheyenne Prairie Generating Station between 2027 and 2029 at a cost of $1.8 billion. The new units would be owned by a non-regulated Black Hills affiliate, not the Wyoming utility.

The gas expansion is only part of the project. The 2.1 GW of third-party resources, which the project release suggests would be powered by turbines and fuel cells, would operate through a privately managed microgrid under Wyoming's Large Power Contract Service tariff. Black Hills would not own these resources. Instead, it would collect a microgrid management fee for coordinating grid operations, reliability services and dispatch across the contracted resources and market purchases.

**Google picks up the tab**

Black Hills said Google would cover the costs of serving the data center, with contractual protections intended to shield existing utility customers from project-related expenses. Those protections address stranded assets, early termination and unexpected costs.

Google has advanced $399 million for long-lead equipment purchases, which Black Hills expects to reimburse before July 2027.

The utility projects about $150 million in net income from the project in 2030 and $2.4 billion in unlevered free cash flow through 2048, after accounting for its generation investment. Black Hills expects to start earning returns on the investment next year through microgrid management fees.

The company has secured an air quality permit for the Cheyenne Prairie expansion and is pursuing additional siting and transmission approvals.

**Google's gas deal draws criticism**

There is no settled answer to what kind of generation should serve the wave of data center loads being built. Utilities facing gigawatt-scale requests have largely turned to new gas-fired capacity that they can site at existing plants.

Tech companies driving data center demand have pledged to run on carbon-free power. Google, for example, has a goal of matching its consumption with clean energy around the clock by 2030.

Between those two positions lies a range of approaches, including nuclear uprates and restarts, long-term power purchase agreements (PPAs) for solar, wind and storage, on-site or behind-the-meter (BTM) generation, and hybrid arrangements like the one in Cheyenne. State regulators, grid operators and developers are working through the trade-offs between speed, reliability, cost and emissions one deal at a time.

Google's latest agreement, however, is drawing criticism for its reliance on new gas.

Jesse Jenkins, a Princeton University energy researcher and co-founder of Firma Power, criticized the Wyoming deal as a departure from Google's emphasis on bringing new clean electricity online. Firma Power develops software and power procurement strategies to assemble renewable energy and storage portfolios for large electricity customers.

His criticism came as Google announced a separate agreement with Constellation Energy to add 890 MW of nuclear capacity through upgrades to existing reactors, a deal Jenkins praised on X as a model for powering data centers.

Jenkins argued that data center developers should instead tap wind, solar and battery storage projects awaiting grid interconnection rather than build new gas-fired generation to meet surging electricity demand. In a post on X, he wrote:

> Yesterday I praised @Google's deal with Constellation for 890 MW of new clean capacity from uprated reactors as a prime example of data center power done right.

>

> Unfortunately, Google also announced a separate deal yesterday with Black Hills Corp. in Wyoming that directly invests…

— Jesse D. Jenkins (@JesseJenkins), October 7, 2026