Black Hills (NYSE:BKH) reported higher third-quarter adjusted earnings and reaffirmed its 2026 outlook as it laid out the expected financial benefits of an agreement to supply a planned Google data center in Wyoming.
The utility expects its generation investment and microgrid management fees associated with the project to deliver approximately $150 million in net income in 2030, Chief Financial Officer Kimberly Nooney said on the company’s earnings call. The estimate is net of financing costs, which she said are passed through under the agreement.
Black Hills also awaits the final regulatory decision needed to close its planned merger with NorthWestern Energy. Chief Executive Officer Linn Evans said the Montana Public Service Commission has until Nov. 12 to issue a written decision.
Third-quarter earnings and outlook
Black Hills reported third-quarter earnings of $0.54 per share under generally accepted accounting principles, including $0.03 per share in merger-related transaction costs. Adjusted earnings rose to $0.57 per share from $0.45 a year earlier.
Nooney said higher margins, driven primarily by new rates, rider recovery and favorable weather compared with the prior-year quarter, more than offset higher operating, financing and depreciation costs.
For the first nine months of 2026, adjusted earnings were $2.89 per share, up from $2.68 a year earlier. The company reaffirmed its full-year adjusted earnings guidance of $4.25 to $4.45 per share and said it was confident it could deliver growth in the upper half of its long-term annual earnings-per-share target of 4% to 6%.
Black Hills had $685 million available under its revolving credit facility at quarter-end. It issued approximately $70 million of equity through its at-the-market program during the first nine months and is evaluating refinancing options for $400 million of notes due in January 2027, Nooney said.
Google project drives investment plans
Black Hills has executed agreements to serve Google’s planned southern Wyoming data center, which is expected to begin taking service in late 2027 and reach its full ramp in late 2030. The project’s contracted peak load and ramp schedule are confidential, Chief Utility Officer Marne Jones said.
The company plans to invest $1.8 billion through a nonregulated affiliate in 564 megawatts of natural gas generation at its existing Cheyenne Prairie Generating Station. Construction is expected to start in 2027, with the facilities entering service in phases through the latter half of 2029.
Black Hills will also manage approximately 2.1 gigawatts of third-party resources serving the data center through a private microgrid. The approximately 2.7 gigawatts of total resources include reserve margins, Jones said. Management expects to begin earning microgrid fees in late 2027 and a cash return on its generation investment during construction.
Nooney said the company expects the Google project to generate an estimated $2.4 billion in unlevered free cash flow through 2048, after accounting for the $1.8 billion generation investment. She declined to break out how much of the projected 2030 net income would come from generation returns versus management fees, citing confidentiality.
The agreements include cost pass-throughs, collateral and financial assurances, protection against stranded asset risk and early termination provisions, Jones said.
More large-load opportunities and transmission spending
Black Hills’ current financial plan includes about 600 megawatts of data center load, driven largely by Microsoft’s expansion and Meta’s new data center. The Google project is additional to that plan and will be incorporated into the company’s updated 2027–2031 financial plan, which management expects to present in February.
The company is negotiating another 600 megawatts of potential load and assessing at least 2.5 gigawatts of earlier-stage opportunities, Jones said. Those exploratory opportunities are not yet in active negotiations and include potential expansion following Microsoft’s land purchase in the Cheyenne area.
Black Hills also expects to invest approximately $700 million in transmission by 2029 to support large-load growth. It has requested approval for the $606 million Aeolus project and the $80 million South Cheyenne project. A proposed tariff would recover transmission-related costs directly from the large-load customers benefiting from the facilities, Jones said.
Rate reviews and merger approval
Jones said Arkansas regulators approved $17.9 million in new annual gas revenue, with rates effective Oct. 12. Approved settlements for South Dakota Electric provide $27.4 million in new annual revenue in South Dakota and $4 million in Wyoming; final rates in both jurisdictions take effect Dec. 1.
The company’s 99-megawatt Lange II generation project is in the final stages of construction and is expected to enter service in the fourth quarter, Jones said.
On the NorthWestern merger, Evans said Black Hills has received six of seven required approvals. The companies completed a four-day Montana regulatory hearing in May after reaching settlements with several key interveners.
About Black Hills (NYSE:BKH)
Black Hills Corporation (NYSE:BKH) is an energy company headquartered in Rapid City, South Dakota. Through its Black Hills Energy businesses, the company provides regulated electric and natural gas utility services to residential, commercial and industrial customers.
Black Hills operates electric utilities and natural gas distribution systems across parts of Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. Its activities include generating and purchasing electricity, transmitting and distributing power, distributing natural gas, and developing and maintaining the infrastructure needed to serve its utility customers.
The company traces its history to the Black Hills region and has expanded through the development and acquisition of utility operations in the central and western United States.
