PUD commissioners halt work on applications from bitcoin & similar data operations

by Kimberlee Craig | Mar 19, 2018

Chelan County PUD Monday stopped taking or processing applications, effective immediately, for electric service for cryptocurrency mining.

PUD board members unanimously imposed the application moratorium after reviewing impacts on utility operations from existing loads and applications for service. This pause will allow lessons learned to be adopted for the existing, under-5 megawatt (MW) rates and policies as well as to develop new rates and policies for above-5 MW loads.  (Discussion begins at 00:44 on the board audio.)

General Manager Steve Wright said impacts from cryptocurrency mining applications are hampering responses to the District’s overall planned work, and threatens the county’s electric grid capacity to meet planned growth. Public health and safety concerns due to rogue operators led to the cities of Chelan and Wenatchee acting to curb operations, especially in residential neighborhoods.

“We do need time to take a deep breath and work through the issues and this may be the best approach,” said Commissioner Randy Smith. (01:11)

Commissioners set a public hearing on the moratorium for 1 p.m. on May 14. Approved applications with fees and charges paid will go forward.

Inquiries about and applications for cryptocurrency operations significantly increased as the price of bitcoin soared last fall. The trend continues with the number of applications filed so far this year approaching 2017’s total.

There are 19 pending applications from cryptocurrency miners for up to 5 MW each, a potential total load of about 16.3 average MW. There are 22 approved and active high density loads in the county, totaling about 13.5 aMW, said Lyle Moore, Customer Service engineering supervisor. Typical countywide growth in a year is about 4 MW.

Staff also is finding rogue cryptocurrency operations requiring time and effort to investigate and respond, said Moore. Many are in homes without the grid equipment needed to serve heavy load, threatening the safety of neighbors and PUD workers.

Lindsey Mohns, Customer Utilities business manager, said with the moratorium in place, staff will:

  • Review and update the existing Schedule 35 rate (under 5 MWs) including considering adding transmission costs and continue to develop rates, fees and processes for service requests of 5 MW or more
  • Widely communicate the consequences of unauthorized operations including adding fees for investigation, monitoring and equipment damage
  • Keep working with city, county and state building code officials
  • Keep adding technology to meet the challenges of detecting and serving cryptocurrency loads

A previous application moratorium for bitcoin mining and similar operations was in place December 2014 until Jan. 3, 2017, as staff developed the rate for use of up to 5 MW.

In other business, commissioners:

  • Reviewed a proposal to create a non-profit Hydro Research Institute in Chelan County as a Public Power Benefit (PPB). Kirk Hudson, Generation and Transmission managing director, outlined the enthusiastic response to the concept from other hydro operators, manufacturers, national research labs and higher education. Local agriculture, healthcare and technology groups also are interested in coordinating research efforts. To start, the institute would compile data from hydro projects and coordinate research on operations with the potential to reduce forced outages, improve operations and maintenance and develop new sensors and monitors. Memberships and the ability to apply for grants would bring in added funding. Commissioners have committed $750,000 in PPB funds to hydro research. Hudson will seek board approval on April 16 to allocate an additional $300,000 to forming the institute. Several community advocates attended to support the institute. “This is a game-changer. I’m excited for the future,” said Commissioner Garry Arseneault. (00:20)
  • Reviewed progress on updating and building new support facilities at Rock Island and Rocky Reach dams as part of the strategic facilities plan. Dan Frazier, Shared Services director, and team members, outlined pros and cons of the “General Contractor/Construction Manager,” approach for design and construction in recommending it to board. Commissioners gave a nod to staff to seek approval from the state’s Project Review Committee to use the approach. Staff will ask board members next month to approve a request for proposals from firms interested in the approach. (0:30)
  • Approved purchase, installation and testing of new systems to manage customer and billing information. Board members set the project budget at $7.9 million. Plans are to launch the project in April 2019 and have it ready to use by summer 2019. (02:15)
  • Heard plans to restore eroding shoreline at Powerhouse Park at Chelan Falls. The park will close July 30 through Oct. 26 for safety and efficiency during the work. (02:38)

Upcoming events:

  • March 23 – Pathways to College/NW Mariachi Festival, 7:30 p.m., Town Toyota Center
  • April 2 – Commission meeting, 10 a.m. , boardroom
  • April 12 – Strategy Partners meeting, 7 a.m., Confluence Technology Center, 285 Technology Way
  • April 16 – Commission meeting, 10 a.m., boardroom
  • April 30 – Commission meeting, 10 a.m. boardroom (rescheduled)
Outages or Emergencies

Visit our Safety and Outage Center for information, or to report an outage, 24 hours a day, 7 days a week, call 1-877-PUD-8123.


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