Grant County has been invaded by a parasitic power hog that threatens all electricity rate classes and will hamper job growth and tax base expansion for years to come if left unchecked.
Attracted by Grant County’s low power rates, cryptocurrency interests have requested 1,700 megawatts from the PUD, or more than three times the current power consumption of Grant County.
Cryptocurrency miners here already control at least 30 megawatts. Multi-megawatt cryptocurrency sites are under construction and being expanded in the Moses Lake area and other parts of Grant County. (One megawatt powers a Walmart superstore that employs hundreds, serves thousands, and pays sales and property taxes.)
Cryptocurrency operations burn huge loads of electricity, provide a handful of jobs, and many pay no property tax at all until their operations are discovered by the county assessor’s office. There is no value added when cryptocurrency sets up shop in metal sheds and storage containers to grab low-cost electricity while exhausting infrastructure paid for by generations of ratepayers.
Cryptocurrency activities are preventing and discouraging the location here of industries that provide long-term jobs and tax base.
The activities of cryptocurrency near Moses Lake has strained substation capacity and created uncertainty that has crippled industrial development efforts. Moses Lake has lost payroll and tax base related to expansion by existing employers and commitments from new employers because of activities of bitcoin miners and uncertainty about the PUD’s response to them.
The Moses Lake City Council passed a moratorium on cryptocurrency operations to protect residential and commercial electrical systems. Other Grant County cities have taken similar actions.
Needless to say, cryptocurrency operations aren’t being recruited. You don’t see ribbon cuttings or grand openings. They don’t put signs on their buildings identifying who they are or what they do.
Crypto miners are secretive and well-known locally for misrepresenting their intentions to gain access to property and PUD power. A crypto miner wanting to locate in Moses Lake said he needed 15 megawatts to grow algae. Miners pay large sums to rent vacant land near power lines, then sheds and storage containers full of bitcoin mining equipment appear soon after.
Globally, bitcoin power use has tripled in the last six months and increased fivefold in the last year. Cryptocurrency uses more electricity than Denmark and 149 other countries and is on pace to use one-half of 1 percent of the world’s electricity this year.
In simple terms, Bitcoin mining is a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second. The more electricity you burn, the higher your chances of winning the competition. While burning more electricity increases your chances of winning, it decreases everyone else’s — so they burn more electricity.
A single bitcoin transaction requires electricity needed to power 30 homes for one day. VISA uses the same power for 525,000 transactions.
China, once home to 70 percent of bitcoin mining, is squeezing bitcoin miners out of the country, which is one reason why they are in Grant County. Bitcoin miners are nomads looking for the next place with the lowest power rates — Quebec, Iceland, British Columbia — until they are asked to move on due to massive power consumption that adds no value.
Hydro-Quebec in late July tripled the rate for cryptocurrency miners to 15 cents kWh “to ensure the security of the electricity supply in the context of the industry’s massive, sudden, and simulataneous energy demands.” As in Grant County, cryptocurrency made requests for power beyond Hydro-Quebec’s generating capacity.
Bitcoin uses more electricity in Iceland than all the country’s residential households. An Icelandic poet says of bitcoin “Evil villains have found the most stupid way to waste energy.”
The Bank of International Settlements, the central bank for central banks, said in late June that bitcoin is a combination of a bubble, a Ponzi scheme, and an environmental disaster, noting the huge electricity consumption of crypto mining.
A University of Texas study released in late June showed bitcoin’s incredible runup to $20,000 last December was manipulated. A federal criminal probe was launched to investigate. Grant County was invaded by a wave of bitcoin miners during that runup. Bitcoin has since lost 2/3 of its value.
Some of the earliest adopters of digital currency were criminals, who use it for extortion, money laundering, tax evasion, fraud, and terrorism. Bitcoin-inspired technology led to extortions through “ransomware” that holds personal and institutional data hostage. They have only scratched the surface of applications for criminal activity using bitcoin.
PUD Commissioners should apply the new Emerging Industry rates to all cryptocurrency operations in Grant County, regardless of how long they have been located here. Do not grandfather in cryptocurrency operations that meet the definitions for the new rate class.
Don’t let cryptocurrency take a chunk (of megawatts) out of Grant County’s future by allowing a few players to become embedded. It is time to end the free ride these parasites are getting at 2 cents kWh for firm, renewable, carbon-free power.
Doug Sly is a Moses Lake resident.