Black Hills Reaffirms 2026 Outlook as Q3 EPS Rises, Details Google Project

Black Hills Corporation (NYSE: BKH) reaffirmed its 2026 adjusted earnings guidance after third-quarter profit increased from a year earlier, supported by new utility rates and rider recovery. The company also outlined the expected financial contribution from agreements to serve Google’s planned Wyoming data center, a project it expects to generate about $150 million of net income in 2030.

Third-quarter GAAP earnings per share rose to $0.54 from $0.34 a year earlier. Adjusted EPS, which excludes costs associated with the pending NorthWestern Energy merger, increased to $0.57 from $0.45. Black Hills recorded $2.5 million, or $0.03 per share, of after-tax merger-related costs in the quarter.

New rates and rider recovery contributed $0.15 per share to the year-over-year result, including $0.12 from electric utilities and $0.03 from gas utilities. Higher customer usage added $0.03 per share, while transportation volumes contributed $0.02. Those benefits were partly offset by higher employee costs, new shares, financing and depreciation expenses, and other items.

Weather was $0.02 per share favorable compared with normal conditions in the quarter. Favorable weather at the electric utilities was partly offset by unfavorable conditions at the gas utilities.

For the first nine months of 2026, GAAP EPS was $2.76, compared with $2.58 in the same period of 2025. Adjusted EPS increased to $2.89 from $2.68. New rates and rider recovery contributed $0.60 per share year to date, while weather reduced earnings by $0.15 per share relative to normal conditions. Higher interest expense and the issuance of new shares also weighed on the comparison.

Guidance and capital plan

Black Hills maintained its 2026 adjusted EPS guidance of $4.25 to $4.45. The midpoint represents 6% growth from adjusted EPS of $4.10 in 2025. The company’s base plan supports growth in the upper half of its 4% to 6% adjusted EPS compound annual growth target for 2026 through 2030.

The base outlook includes 600 megawatts of data-center demand associated with Microsoft and Meta and assumes minimal related capital investment. It excludes the planned Google data center, additional transmission projects for large-load customers and the pending NorthWestern Energy merger.

Black Hills expects to invest $905 million in 2026, excluding generation investments for Google. Its broader base capital forecast totals $4.7 billion for 2026 through 2030. The company ended the quarter with $685 million of available liquidity under its revolving credit facility. Moody’s rates the company Baa2 and S&P rates it BBB+, both with stable outlooks.

Google project expands large-load opportunity

During the quarter, Black Hills executed definitive agreements through 2048 to serve Google’s planned data center in southern Wyoming. The project’s resource mix totals 2.7 gigawatts, including planned reserve margins: 564 MW of company-owned natural-gas generation, a 0.6-GW grid interconnection and 2.1 GW of contracted third-party resources.

Black Hills expects to invest $1.8 billion in the company-owned generation through a non-regulated affiliate. Earnings on that investment are expected to begin with construction in mid-2027. Generation is scheduled to enter service in phases from late 2027 through 2029, with initial data-center service targeted for late 2027 and peak load in 2030.

The company also expects to receive microgrid management fees based on contracted minimum peak load beginning in late 2027 and increasing as the project ramps. Black Hills projects approximately $2.4 billion of unlevered free cash flow through 2048 after deducting the $1.8 billion generation investment. That estimate excludes additional transmission-expansion investment.

The agreements include cost pass-through mechanisms, collateral and financial-assurance requirements, customer advances for long-lead equipment, and provisions intended to protect against stranded assets and early termination. The company said the structure is designed to prevent costs from shifting to other customers.

Beyond signed agreements for Google and the 600 MW of Microsoft and Meta demand already in its plan, Black Hills said it is in active negotiations involving another 600 MW and is assessing more than 2.5 GW of early-stage or exploratory opportunities.

To support large-load demand, the company has requested Certificates of Public Convenience and Necessity for $686 million of Wyoming transmission projects. These include the $606 million Aeolus Transmission Project and the $80 million South Cheyenne Transmission Project. Black Hills expects Wyoming regulators to decide on the projects and its proposed Large Customer Transmission Cost Adjustment Mechanism by mid-2027. The proposed mechanism would allocate related transmission costs directly to large-load customers.

Regulatory projects and merger timeline

Black Hills received approval for new Arkansas Gas rates providing a $17.9 million annual revenue increase, effective Oct. 12, 2026. Regulators also approved South Dakota Electric settlements covering operations in South Dakota and Wyoming, with final rates scheduled to take effect Dec. 1. A Colorado Electric request seeks a $26.7 million annual revenue increase and recovery of $184 million invested since the utility’s previous rate review in 2024; the presentation indicated new rates are sought for the first quarter of 2027.

The company remains on track to place the 99-MW Lange II natural-gas generation project into service in the fourth quarter of 2026. It also began civil work on a 50-MW battery storage project in Colorado, with completion planned for late 2027.

Black Hills continues to target completion of its merger with NorthWestern Energy by the end of 2026. The transaction has received shareholder, federal antitrust, FERC, Nebraska and South Dakota approvals. A Montana decision was pending, with a statutory deadline of Nov. 12, 2026, following a partial settlement and completed hearing.

The outlook remains subject to regulatory approvals, execution of the capital program, financing conditions, inflation, interest rates, supply-chain and labor constraints, severe weather, wildfire and cybersecurity risks. The Google project also depends on construction and equipment schedules, permits, transmission availability, customer demand, counterparties and satisfaction of contractual obligations. Completion of the NorthWestern merger remains contingent on the remaining required approvals and their terms.