Oct 14 (Reuters) - American Electric Power said on Wednesday it plans to invest about $4 billion in a 702-megawatt fuel cell project near Cheyenne, Wyoming, to supply Alphabet's Google under a 20-year power purchase agreement.
Shares of the utility company are up over 3.1% in premarket trading.
Technology companies are seeking new sources of electricity to meet rising demand from data centers and artificial intelligence, as grid capacity and slow build-out of new infrastructure constrain supply.
Earlier this month, Google signed a similar deal with Black Hills Corp to power its proposed data center in Cheyenne, with the utility planning to spend $1.8 billion on new generation capacity between 2027 and 2029.
AEP said the project will be developed by Cheyenne Fuel Cell, which is about 92% owned by the company, with the remaining stake held by funds advised by Basalt Infrastructure Partners.
Construction is expected to begin in 2026, with full operations expected by the end of 2028.
The facility will use fuel cell technology developed by Bloom Energy to provide on-demand electricity for Google's growing energy needs in the Cheyenne area.
AEP exercised an option to buy a substantial portion of up to 900 MW of additional Bloom cells, in a deal valued at about $2.65 billion earlier in January.
Reporting by Dharna Bafna in Bengaluru; Editing by Vijay Kishore
Source: Reuters