Black Hills Corp, a US utility company operating in several states, has announced that it has signed definitive agreements through 2048 to serve a Google data center that is being constructed in Cheyenne, Wyoming. The agreements include a Large Power Contract Services Agreement (LPCSA) and a Generation Facilities Agreement (GFA). Black Hills will invest US$ 1.8 billion between 2027 and 2029 to construct 564 MW of generation capacity.
The utility company will provide up to 590 MW of grid-connected energy through a mix of company-owned generation and market energy purchases. Black Hills added in a press release that it 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. In total, the Google data center will be served by 2.7 GW of resources.
“We are pleased to support Google’s planned investment in Wyoming while remaining firmly committed to providing safe, reliable, and cost-effective service to every customer,” said Linn Evans, Black Hills Corp President and Chief Executive Officer. “The agreements demonstrate how innovative energy solutions can support economic growth while ensuring existing customers are protected. Importantly, these agreements and supporting regulatory mechanisms are structured so that Google bears all costs associated with serving the planned data center throughout the life of the project. We are excited that this project will create jobs, strengthen regional infrastructure, and contribute to Wyoming’s long-term economic development.”
The utility said that it expects to begin earning a return on its generation investment when construction begins in 2027. Revenue from microgrid management fees is expected to begin in late 2027. All told, the project is expected to generate approximately US$ 150 million in net income in 2030. Black Hills also expects the project will deliver approximately US$ 2.4 billion in unlevered free cash flow, net of US$ 1.8 billion in generation capital investment. Google has provided Black Hills with US$ 399 million in refundable advances to procure long lead-time equipment. Those advances are expected to be reimbursed by June 30, 2027.
The data center started out as a project being developed by Crusoe under the banner Project Jade. Bloomberg reported in June that Crusoe was pushed out of the project after failing to lock in customers. The project has since been taken up by Jupiter Star Holdings, a wholly owned subsidiary of Google, and has been renamed Project Tembo.
According to papers filed with Laramie County, the facility will sit on 716 acres and include four data center halls, an office hub, logistics and network buildings, and new access roads. The capacity of each data center hall is unknown at this stage.
Black Hills has secured some regulatory approvals and is seeking others in support of the project. So far, it has received a Certificate of Public Convenience and Necessity for the Robinson substation and an air quality permit for an expansion of the company’s Cheyenne Prairie Generating Station. It has also applied for an industrial siting permit for the station’s expansion.