Capital · United States

Black Hills to build 564 MW of new gas, manage 2.1 GW microgrid for Google data center in Wyoming

Credited to Power Engineering · power-eng.com · 20h ago

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Google’s next big data center needs serious power. Black Hills Corp. is bringing the turbines — and a $1.8 billion investment — to Cheyenne, Wyoming. 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 for $1.8 billion. The new units would be owned by a non-regulated Black Hills affiliate, not the Wyoming utility.

But the gas expansion is only part of the power play. The project also includes 2.1 GW of third-party resources, which the project release suggests would be powered by turbines and fuel cells. Those resources would operate through a privately managed microgrid under Wyoming’s Large Power Contract Service tariff. Black Hills would not own them but instead 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 by introducing 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 which they can site at existing plants.

Tech companies driving the 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.

There are a range of approaches between those two positions. These include nuclear uprates and restarts, long-term 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 seemingly working through the trade-offs between speed, reliability, cost and emissions one deal at a time.

Constellation, Vistra uprate deals signal fastest path to new nuclear megawatts

But Google’s latest agreement 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.

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… pic.twitter.com/MW2jNEZf6k — Jesse D. Jenkins (@JesseJenkins) October 7, 2026

Power & SitesUnited States

Anthropic-linked $366m data center project filed for in Cedar Creek, Texas

Credited to Data Center Dynamics · datacenterdynamics.com21h ago

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First building will be located on Earl Callahan Road

A proposal for a $366 million data center project in Cedar Creek, Texas, has been filed with the Texas Department of Licensing and Regulation.

Dubbed Project Longhorn - Building One, the data center will span some 498,165 sq ft (46,281 sqm) and be located at Earl Callahan Road, near Walter Hoffman Road, in Cedar Creek, Bastrop County.

Construction is aiming to begin on November 30, 2026, and be completed by the end of January 2028.

Representatives for Black Chamber, Pacifico Energy, and Anthropic did not respond to BizJournals' request for comments on a 2,842-acre gas-fired electric generation facility to support a major data center campus in the Cedar Creek area of Bastrop County, which AI lab Anthropic is reportedly in talks to lease.

At full buildout, the project is expected to offer 710MW of "site-rated redundant power using simple-cycle natural gas turbines" that will support 490MW of IT capacity.

The project is located near EdgeConneX's major campus in the area, for which four more data center buildings were filed in August 2026. In total, EdgeConneX’s presence in Bastrop County could total more than a dozen buildings across more than 1,500 acres at full build-out. At least part of the capacity is set to be leased to AI cloud firm CoreWeave.

Bastrop County is located outside of Austin, Texas.

Texas as a whole has seen a massive influx of data center projects in recent years, but has begun to resist the tidal wave. In September, Governor Greg Abbott halted all new data center permits from the state’s environmental agency until it completes a large-scale audit of facilities seeking to connect to the Electric Reliability Council of Texas (ERCOT) grid. ERCOT aims to complete the audit by December.

Despite this, the new filing in Cedar Creek seems to suggest that the project is moving ahead.

Pacifico Energy is the energy arm of investment firm Pacifico Group. Based out of San Juan, California, the company has interests in both renewable and fossil fuel-based energy projects. Earlier this year, the company secured a 7.65GW air permit from the Texas Commission on Environmental Quality (TCEQ) for its planned 5GW GW Ranch project in West Texas.

Black Chamber Partners is part of a private equity firm with a focus on data center development, typically in Northern Virginia. The group was founded in 2019 and focuses on developing build-to-suit powered shells for hyperscalers.

Original · Data Center Dynamics

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First building will be located on Earl Callahan Road

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