Wyoming prepares major power buildout for Google data center: And what happens next

Wyoming is preparing for a major electricity expansion as Black Hills Corp. moves to support a proposed Google data center in Cheyenne. The utility plans to invest $1.8 billion between 2027 and 2029, adding new generation capacity as technology companies race to secure enough power for increasingly demanding data center operations. The project is expected to begin receiving electricity in late 2027 and gradually increase its demand through 2030. That timeline gives Black Hills several years to build generation and organize additional resources before the facility reaches its expected peak load, making the project a significant new piece of Wyoming’s energy infrastructure. Cheyenne is getting new generation

Black Hills plans to construct 564 megawatts of new natural gas generation at its existing Cheyenne Prairie Generating Station. The facility will be used as the main source for the utility’s grid-connected service to Google, with additional electricity coming through market purchases and existing utility service. Source: SravanChandran/Depositphotos

The planned generation is part of a much larger power arrangement. Black Hills expects the data center to draw from a 2.7-gigawatt resource mix that includes reserve margins, meaning the utility is preparing a broader supply structure rather than relying solely on the new plant being built at Cheyenne Prairie. A private microgrid adds capacity

The electricity plan also involves resources outside Black Hills’ own generation fleet. The utility will manage about 2.1 gigawatts of third-party resources located in Wyoming through a privately managed microgrid created to serve the planned data center. That arrangement gives Black Hills another way to coordinate electricity as the facility’s requirements grow. The company will manage grid operations, reliability services and energy dispatch across the contracted resources and market purchases, adding a management role alongside its investment in new generation. Google will carry project costs

A major feature of the agreement is how the new electricity costs will be handled. Google is required to cover the costs associated with supplying power to the planned data center, preventing the expenses tied to its additional electricity needs from being shifted onto other utility customers. The agreements also include protections covering potential changes to the project. Black Hills said the contracts provide safeguards related to early termination, stranded generation assets and financial commitments, creating a structure intended to protect existing customers while allowing the utility to make the required investment. Black Hills sees major returns

The project is not only an infrastructure undertaking for Black Hills. The utility expects the agreement to contribute about $150 million to its net income in 2030, with earnings coming from its generation investment and fees for managing the private microgrid.

Black Hills also expects the arrangement to provide long-term financial benefits beyond the initial construction period. The company projects approximately $2.4 billion in unlevered free cash flow through 2048 after accounting for the $1.8 billion generation investment. Transmission work is also advancing

The planned data center requires more than new generation. Black Hills is also pursuing transmission-related work around Cheyenne as it prepares for the project and other potential large electricity customers in the region. Source: SERGION18/Depositphotos

Several regulatory steps are already underway or completed. A certificate for the Robinson substation was approved in May, an industrial siting permit for the Cheyenne Prairie expansion was filed in July, and an air quality permit for the expansion was approved in August. The company also filed for a South Cheyenne transmission expansion certificate in September. Little-known fact: Data centers can operate deep underground, including one in Pennsylvania that sits 220 feet below ground inside a former limestone mine. Wyoming is part of a trend

The Cheyenne agreement reflects a larger change in the relationship between technology companies and electricity providers. Artificial intelligence has increased the amount of computing capacity companies want to build, creating a need for large and dependable electricity supplies in locations where new data centers are planned. Google is pursuing major power arrangements in other parts of the country as well. The company separately agreed to obtain 3.59 gigawatts from Constellation Energy, which plans to invest more than $4.3 billion in its generation fleet. That deal includes power from nuclear facilities, showing how technology companies are looking across different generation sources as they secure electricity for data center growth. Little-known fact: U.S. data centers used about 4.4% of the nation’s electricity in 2023, up from about 1.9% in 2018. The project changes utility planning

For Wyoming, the Cheyenne development shows how a single large technology project can influence planning across several parts of the power system. Generation, transmission, resource management and regulatory approvals all have to move together as Black Hills prepares to meet the facility’s future needs. Source: Depositphotos

The arrangement also creates a different financial model for serving a major new electricity customer. Because Google is responsible for the costs tied to its data center, Black Hills can expand its system while maintaining protections for other customers.

If construction and regulatory plans stay on schedule, Cheyenne will become the center of a substantial new power arrangement, with Google funding the electricity resources needed for its operation while Black Hills builds and manages much of the system required to serve it.

That combination could make the Wyoming project an important example of how utilities respond when large technology facilities arrive with unusually high power requirements. A major buildout is taking shape

The proposed Google data center remains a future project, while the related service agreements took effect Sept. 30, 2026, and extend through 2048. Black Hills expects returns on its generation investment to begin as construction starts in 2027, with microgrid management fees scheduled to begin later that year. The project ultimately connects Wyoming’s energy system to the expanding demands of the technology industry. If construction and regulatory plans stay on schedule, Cheyenne will become the center of a substantial new power arrangement, with Google funding the electricity resources needed for its operation while Black Hills builds and manages much of the system required to serve it. TL;DR

Black Hills plans to invest $1.8 billion in new generation from 2027 through 2029. The utility will build 564 megawatts of natural gas generation in Cheyenne. Google’s planned data center is expected to begin taking power in late 2027. The facility is expected to reach peak electricity demand in 2030. Black Hills will manage about 2.1 gigawatts of third-party Wyoming resources through a private microgrid. Google will cover the costs associated with supplying electricity to its data center. Black Hills expects the project to add about $150 million to net income in 2030. The utility is also pursuing transmission upgrades around Cheyenne. This article was created with AI assistance and human editing. If you liked this, you might also like:

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