Black Hills Corp. to Power Meta's New Data Center in Wyoming with Innovative Energy Solutions and Mission-Critical Reliability

Rhea-AI Summary

Black Hills Corp. (NYSE: BKH) announced a partnership with Meta to power its new data center in Cheyenne, Wyoming. Black Hills Energy, operating through Cheyenne Light, Fuel & Power, will provide customized energy solutions and high reliability. This partnership leverages the Large Power Contract Service tariff, enabling efficient energy procurement for industrial clients since 2016. The initiative supports Wyoming's economic diversification and is expected to boost Black Hills' earnings per share from 5% to 10% over the next five years. Black Hills Corp. serves 1.34 million customers across eight states.

Positive

• Partnership with Meta to power a new data center in Wyoming.
• Expected earnings per share increase from 5% to 10% over the next five years.
• Utilization of the Large Power Contract Service tariff to meet specific energy needs efficiently.

Negative

• None.

Insights

Financial Analyst

Black Hills Corp.'s recent announcement involves a new partnership with Meta to power a data center in Wyoming, which is a significant development from a financial perspective. Firstly, this partnership underscores a strategic growth avenue for Black Hills, as data centers are energy-intensive and provide stable, long-term revenue streams.

Black Hills Corp.'s mention of their 5% earnings per share (EPS) contribution from data centers, which is expected to grow to approximately 10% over the next five years, indicates a considerable impact on their financial performance. This growth prospect is particularly relevant for investors, showcasing both short-term stability and long-term potential. An increase in EPS reflects positively on shareholder value and can drive stock price appreciation.

The implementation of the Large Power Contract Service tariff is also noteworthy. This tariff helps mitigate risks associated with large-scale capacity additions and rate impacts, protecting other customers while facilitating industrial growth. Such a model indicates a balanced approach that investors often look for, balancing growth with risk management.

In summary, the announcement is financially significant, suggesting positive revenue growth, risk mitigation and enhanced shareholder value.

Market Research Analyst

From a market perspective, the partnership between Black Hills Corp. and Meta to power a new data center is a strategic move that aligns with current industry trends. Data centers are central to the operations of tech giants like Meta and the demand for reliable and sustainable energy solutions is increasing. Black Hills Corp.'s ability to provide customized energy resources that align with sustainability objectives is a key competitive advantage.

Moreover, the mention of Wyoming's efforts to diversify its economy by attracting new industries suggests a growing market for energy services tailored to data centers and other industrial loads. This positions Black Hills Corp. as a pivotal player in this expanding market. Their capital-light service model, as highlighted, indicates an efficient allocation of resources, which is favorable for long-term growth.

In terms of industry norms, the innovative energy solutions and mission-critical reliability touted by Black Hills Corp. are essential for data center operations, which require uninterrupted power supply. The company's established track record in this domain adds credibility to their claims.

Overall, this development is a positive indicator of market expansion opportunities for Black Hills Corp., driven by the growing demand for data center energy solutions.

Tech Expert

From a technology perspective, the collaboration between Black Hills Corp. and Meta to power a new data center is a critical step in supporting the tech giant's operational needs. Data centers are the backbone of Meta's digital infrastructure, hosting vast amounts of data and requiring seamless, reliable power. The emphasis on innovative energy solutions indicates a focus on sustainability and efficiency, aligning with Meta's broader corporate objectives.

The Large Power Contract Service tariff, which enables Black Hills Corp. to provide tailored energy solutions, is particularly important. It ensures that the energy supply meets the specific demands of data centers, which have unique load profiles. This tailored approach not only supports operational efficiency but also contributes to sustainability goals, which are increasingly important in the tech industry.

This partnership highlights Black Hills Corp.'s capability to align energy solutions with the technological and sustainability needs of major tech firms. This alignment is important as data centers continue to scale, requiring more advanced and reliable energy solutions.

RAPID CITY, S.D., July 11, 2024 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced it will partner with Meta to provide power for its newest data center in Cheyenne, Wyoming, an area served by the company’s electric utility, Cheyenne Light, Fuel & Power Company, doing business as Black Hills Energy.

"Black Hills Energy has been providing energy solutions and mission-critical electric reliability to support data center expansion in Wyoming for more than 10 years now,” said Linn Evans, president and CEO of Black Hills Corp. “With our innovative service model and industry-leading reliability, we stand ready to serve Meta with customized energy resources essential to their data center operations and in line with their sustainability objectives.”

Black Hills Energy serves its Wyoming data center customers through a unique energy procurement model which provides qualifying customers with solutions to meet their specific energy requirements. This is enabled by the Large Power Contract Service tariff, in place since 2016, and developed in partnership with one of the company’s early data center customers.

“With our Large Power Contract Service tariff in Wyoming, we are well-positioned to serve growing industrial and data center load while protecting other customers from risks associated with large-scale capacity additions and rate impacts,” said Evans. “This capital-light service model is delivering value for our customers, communities and shareholders, which is integral to our long-term growth strategy. Today, our data center business is contributing 5% of our earnings per share, with approximately 10% of EPS anticipated over the next five years.”

“As Wyoming continues to diversify its economy by attracting new industries to the state, we remain committed to providing the critical energy services vital to this effort,” said Evans.

Learn more at https://www.blackhillsenergy.com/services/power-your-data-center.

Black Hills Corporation
Black Hills Corp. (NYSE: BKH) is a customer-focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 1.34 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. More information is available at www.blackhillsenergy.com.

Investor Relations
Jerome E. Nichols
605-721-1171
jerome.nichols@blackhillscorp.com

24-Hour Media Relations Line
888-242-3969

Caution Regarding Forward Looking Statement

This news release includes “forward-looking statements” as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this news release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward looking statements, including the earnings expectations from the data center business. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, the risk factors described in Item 1A of Part I of our 2023 Annual Report on Form 10-K filed with the SEC, and other reports that we file with the SEC from time to time. New factors that could cause actual results to differ materially from those described in forward looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

FAQ

What is the significance of Black Hills Corp.’s partnership with Meta for BKH?

The partnership is significant as it provides Black Hills Corp. with an opportunity to power Meta's new data center, potentially increasing BKH's earnings per share from 5% to 10% over the next five years.

How does Black Hills Corp. power Meta's new data center in Wyoming?

Black Hills Energy will use its Large Power Contract Service tariff to provide customized, reliable energy solutions to Meta's new data center in Cheyenne, Wyoming.

What are the financial implications of Black Hills Corp.'s new partnership with Meta?

The partnership is expected to increase Black Hills Corp.'s earnings per share contribution from the data center business from 5% to approximately 10% over the next five years.

How does the Large Power Contract Service tariff benefit Black Hills Corp. and its customers?

The tariff allows Black Hills Corp. to efficiently meet the specific energy requirements of large industrial clients while protecting other customers from risks associated with large-scale capacity additions and rate impacts.

What role does Black Hills Corp. play in Wyoming's economic diversification?

By providing critical energy services to new industries, including Meta's data center, Black Hills Corp. supports Wyoming's efforts to diversify its economy.