Black Hills to Power Alphabet Data Center in Cheyenne
The energy provider will supply 590 megawatts of electricity to support the facility's operations through 2048.
Updated on Oct. 29, 2026 in Data Centers
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In an agreement reached in early October 2026, Black Hills committed to providing 590 megawatts of power to an Alphabet data center in Cheyenne. The partnership is designed to meet the electricity demands of AI infrastructure while avoiding strain on the regional grid.
Why it matters
This deal ensures that the massive power requirements of modern AI data centers are met with dedicated capacity rather than by diverting energy from existing regional consumers. It also bolsters the long-term infrastructure stability for the city of Cheyenne.
Black Hills plans to build 564 megawatts of new natural gas electricity-generation capacity as part of a $1.8 billion infrastructure investment. This addition will help push the company's total potential power output to 2.7 gigawatts.
The players
Black Hills
Black Hills is an energy provider that serves markets in regions including Cheyenne and has a history of 56 consecutive years of dividend increases.
Alphabet
Alphabet is a global technology conglomerate that owns and operates massive data center infrastructure for its various internet-based services.
The details
Alphabet opted for this long-term supply agreement to secure a reliable power source for its data center operations through 2048. To facilitate the project, Black Hills is making a significant capital expenditure to expand its generation capabilities.
Timeline
Black Hills and Alphabet finalized their agreement in early October 2026.
The project is expected to generate $150 million in net income by 2030.
The electricity supply contract is scheduled to conclude in 2048.
The Tech Race
This utility expansion follows the industry trend of securing dedicated energy sources to sustain the rapid scaling of AI data centers. By building new natural gas capacity, Black Hills is positioning itself to support modern computational demands that legacy grids were not designed to accommodate.
The agreement aims to protect local Cheyenne residents from potential power shortages by building new, dedicated energy capacity for the data center. This ensures that Alphabet's high-demand facility does not compete with or strain the electricity supply available for the general public.
The takeaway
Large-scale technology companies are increasingly acting as direct partners in regional power infrastructure planning to ensure operational continuity. For the energy sector, these partnerships provide a pathway to invest in large-scale generation capacity with guaranteed long-term revenue.
Further reading
For more information on the local impact of this infrastructure, visit the Data Centers section.
Source note: This article includes information reported by The Motley Fool.
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