Black Hills Power commits 2.7 GW long-term supply to Google's Wyoming data center campus

Black Hills Corp, a US utility company, has signed definitive agreements through 2048 to serve a Google data center under construction in Cheyenne, Wyoming. The agreements include a Large Power Contract Services Agreement (LPCSA) and a Generation Facilities Agreement (GFA).

Between 2027 and 2029, Black Hills will invest $1.8 billion to construct 564 MW of generation capacity. The utility will provide up to 590 MW of grid-connected energy through its own generation and market purchases, while managing approximately 2.1 GW of Wyoming-based, third-party contracted resources via a privately managed microgrid under its Large Power Contract Service (LPCS) tariff. In total, the Google data center will be served by 2.7 GW of resources.

Linn Evans, Black Hills Corp President and Chief Executive Officer, stated that the agreements support Google's investment while protecting existing customers and ensuring that Google bears all costs associated with serving the data center.

The project is expected to generate approximately $150 million in net income in 2030. Black Hills anticipates $2.4 billion in unlevered free cash flow, net of the $1.8 billion generation capital investment. Google has provided Black Hills with $399 million in refundable advances to procure long lead-time equipment, to be reimbursed by June 30, 2027.

The data center, named Project Tembo, is being developed by Jupiter Star Holdings, a wholly owned subsidiary of Google. The facility will span 716 acres and include four data center halls, an office hub, logistics and network buildings, and new access roads.

Black Hills has secured regulatory approvals including a Certificate of Public Convenience and Necessity for the Robinson substation and an air quality permit for an expansion of its Cheyenne Prairie Generating Station. The company has also applied for an industrial siting permit for this expansion.