It is rarely that the public hearing for rural electric utility becomes sell-out event. But contrary to the usual precedents, a large crowd turned out at Wenatchee two weeks ago for a hearing about Bitcoin mining in Chelan County.
Chelan County and its neighbouring Douglas and Grant counties, has attracting cryptocurrency “miners.”, due to the region’s ultra-cheap hydropower, ever since U.S. Bitcoin boom of 2012. Statistics show that by end of the year, the Mid-Columbia Basin could account for about 30 percent of the new bitcoins globally and also a higher share of older crypto, including Litecoin and Ethereum.
The mining process involves trillions of computer calculation and would also consumer a huge power supply.
Following the boom, the energy-intensive operations are taking a toll on the Basin’s three public utilities districts (PUDs). The demand for electric power in a normal year estimated to grow by about 4 megawatts — enough for around 2,250 homes in Chelan County alone. The bitcoin fever has also attracted unpermitted home miners running computer servers far too large for the electrical grids of residential neighbourhoods.
The Bitcoin ‘gold rush’ had become too overwhelming by February that the Chelan County PUD declared a three-month moratorium on new mines. The purpose behind the moratorium was to evaluate whether the county could absorb even a portion of the demand. However, due to the complexity of the utility, in the recent hearing the commission has further extended the freeze for another three months.
The crux of the matter is that the public utility is usually managed with an expectation of incremental growth while on the other hand bitcoin mining, is more in tune with soaring demand, massive price volatility, and an investment time frame measured in years or even months.
The question before Chelan County PUD is to decide on the two modes’ compatibility. On one end the each week of moratorium amounts to lost opportunity, on the other end, the community pressure against this also exist.
Besides Chelan Country, across the Columbia River in Douglas County, the exponential growth of the crypto mining has also disturbed the PUD’s existing distribution system. Even in the Grant County, where there is usually a surplus available, a whopping 1,700 megawatts was requested by the miners. This was thrice the power consumed by the commercial users, farmers and the county’s residents consume.
The increased power consumption by the local miners would also affect the exporting which was done at a premium price as most of the companies use to produce a surplus of what is actually needed or consumed in the county.
There would also be need for investment in new substations, transmission lines, and other infrastructure. The county’s are tackling the issue of increased price by many method including requiring miners to pay up front for any new infrastructure, as done in Douglas County.
The utilities are hence trying to strike a balance. They are in the arena of creating policies that could protect the public at the same time weeding out the prospective miners who are unable or unwilling to make a long-term commitment to the Basin. The utilities’ decision on how to treat the new industry would highly impact the bitcoin mining industry and would go well beyond the Mid-Columbia Basin
