Black Hills Lands Google Data Center Deal, But the Stock's Big Move Comes With a Catch
Published on 10/07/2026 at 17:23 | Editorial boerse-global.de
Black Hills Corporation has secured a long-term power supply agreement with Google for a planned data center in Cheyenne, Wyoming — a deal that sent the utility's shares sharply higher in early trading before the rally cooled considerably.
The stock jumped 5.4% at the open, reaching EUR 66.25, but those gains proved fleeting. By late morning, the advance had narrowed to 1.6%, leaving the shares at EUR 63.85. Even so, the pullback keeps the paper within striking distance of its 52-week high of EUR 66.90.
Contract Terms and Timeline
The binding agreements took effect on September 30 and extend through 2048, underscoring the long-term nature of the commitment. Under the arrangement, Google will shoulder the full cost of supplying the data center — a structure that shields Black Hills' existing ratepayers from any financial burden.
Reuters reported that the deal reflects a broader push by major technology companies to lock down reliable electricity supplies for power-hungry AI data centers, highlighting the growing role regional utilities play in building out modern server infrastructure.
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First deliveries to the Google complex are expected around the end of 2027, though reaching full peak load will take longer — that milestone is targeted for 2030. From that project year onward, Black Hills management anticipates a contribution to net income of roughly $150 million.
$1.8 Billion Buildout
Meeting the contractual obligations requires a substantial expansion of generation capacity. Black Hills plans to invest $1.8 billion between 2027 and 2029, funding the construction of 564 MW of natural gas-fired generation. The plan also includes up to 590 MW of grid-connected service, supplemented by approximately 2.1 GW of third-party resources.
The emphasis on firm baseload capacity is designed to guarantee uninterrupted operation of the planned server farm, with external generators folded into the mix alongside the utility's own assets.
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Sector Tailwinds and Regulatory Hurdles
The announcement landed during a broadly strong session for utility stocks. On Tuesday, the sector led gainers across U.S. markets, lifted by corporate news from industry heavyweights Constellation Energy and Vistra. That sector-wide momentum gave Black Hills' shares an additional boost.
Meanwhile, the company's regulated core business faces a key regulatory checkpoint. The Wyoming Public Service Commission has scheduled a hearing on Black Hills Energy's request to raise electricity rates. That review represents a significant framework factor for the regional operation, though the commission has yet to issue a formal ruling on the rate application.
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