Gentle, EDC members conspired with local crypto exec to take down PUD, power large crypto facility4/11/2023 In the fall of 2020 and spring of 2021 Economic Development Council (EDC) board members Russ Pelleberg (who is the EDC treasurer) and Kim Gentle conspired with local crypto executive Monty Stahl to take down our citizen-owned PUD. Part of their plan was to set up their own utility that would power a large crypto facility in Pend Oreille County. Kim Gentle, Pelleberg, and Stahl engaged in a common business enterprise with the promise of significant financial return for each party to build a 10-40 MegaWatt crypto mining facility on Stahl's property. Their plan was to take control of the PUD's Pine Street Substation in Newport and then create a new "Newport PUD" which would provide power to the crypto facility.
According to emails between Kim Gentle, Pelleberg, and Stahl obtained through public record request show that in September 2020, Gentle began working with Pelleberg to set up a "Newport PUD." They both acted as executives of this prospective PUD and even offered contract terms on behalf of the prospective "Newport PUD" to at least one crypto mining company. The plan relied on Pelleberg using his position as Newport City Manager to persuade the City Council to reject a pending renewal of the City's franchise agreement with our PUD. They hoped this would force our PUD to sell the substation to them. They would then contract with investor-owned utility Avista for power for the City of Newport and large crypto facility would use much more power than the city. Gentle even offered to provide a lawyer to help speed up the process. Gentle wrote to Pelleberg, “This would be catastrophic for the PUD as they cannot serve the county without the Pine Street substation.” She also thought that once our PUD lost ownership of the Pine Street substation, “the PUD would be forced to sell other infrastructure.” (Download the email below) In June 2021 email, PUD Commissioner Curt Knapp wrote that the trio "were in cooperation with taking down Pend Oreille PUD." He continued in bold type, "You need to understand, we believe this was, and continues to be an all-out attack on our public utility district." A key part of the plan was building a 10 MW crypto mining facility, which they planned to expand to 40 MW, on a property owned by Stahl outside of Newport. In the fall of 2020, Stahl was already using the property to host crypto mining computers owned by other companies such as Allrise Capital. When the PNC Paper Mill bankruptcy in 2020 (leaving our PUD with $22 million in unpaid bills) compelled our PUD to raise rates, Stahl's hosting business could no longer operate profitably, and he was forced to close it down on December 31, 2020. Stahl and Gentle hoped to redeem his fortunes by selling the property to a crypto company called Bitcap (www.bitcap.co). The facility, which Gentle hoped to label "the Washington Computational Corridor" would specialize in mining the cryptocurrency Ethereum. Both Gentle and Pelleberg were actively involved in the crypto project. Gentle drafted a non-disclosure agreement that all three signed (Pelleberg signed on behalf of the city of Newport), conducted a site visit and evaluation of the power infrastructure on Stahl's property at 32 Telephone Rd, and provided a quote for power delivery from the "Newport PUD" to the crypto facility (Note: Bitcap planned on operating the facility under an LLC called MagicPool). (Download the emails below) She also encouraged Pelleberg to use his private email for communications, which would make their discussions inaccessible to future public records requests. However, because the "Newport PUD" project was not progressing quickly enough (the franchise agreement between Newport and our PUD did not expire until later that summer), Bitcap had to seek a power contract with our PUD. Using a page from the crypto mining playbook, Bitcap promised that they would bring up to 100 jobs into the county and millions of dollars of taxable income. When our PUD refused to make its other customers subsidize their power bill, Bitcap decided the PUD-proffered cost of 4.5 cents per kilowatt was too expensive for them and abandoned the effort in early April. Gentle helped ghost write a public letter, ostensibly from Bitcap, to the "Constituents of Newport" attacking our PUD for "stifling economic development." In fact, our PUD was only guilty of protecting its citizen owners and the residents and business of Pend Oreille County, including Newport, by refusing to make other customers subsidize crypto mining. Had the Newport PUD/ Bitcap crypto facility plan succeeded, it is likely that not only would our PUD have faced financial insolvency, but the City of Newport would have faced imminent bankruptcy. Under their plan, the City of Newport would have taken on millions of dollars of debt to take over the Pine Street Substation. Just over a year after the plan would have gone into effect, the Bitcap crypto facility would have gone bankrupt. In September 2022, Ethereum halted all mining operations for the crypto token and because the computers used to "mine" Ethereum cannot be efficiently used to profitably mine Bitcoin or other cryptocurrencies, the failure of the Newport PUD's largest customer, using many times the amount of power as the City of Newport, would have left the residents of the city with millions of dollars of debt that they would have to pay for. Within weeks of the Bitcap project failing, Stahl sold his crypto facility outside of Newport to Allrise Capital. Last Fall, Stahl told the County Republicans that he was responsible for persuading Allrise Capital to purchase the former PNC Mill and that the bitcoin mining facility there was his "brain child." Given that timing of the change of Stahl's plans from selling to Bitcap to selling to Allrise occurred only a couple of weeks before Allrise became a last-minute bidder on the mill site (Allrise became a qualified bidder on April 19, the auction was on April 23), it is likely that he was still actively working with Pelleberg and Gentle. Both used their positions (in Gentle's case her husband's position as well) to solicit the Bankruptcy Trustee on Allrise's behalf. Futhermore, Allrise Capital purchased the mill with intent to convert it into a large crypto facility at a time when Gentle and Pelleberg were still planning on replacing our PUD with their own utility with the plan of powering a large crypto mining facility. The situation has the appearance of financial conflict of interest. In the summer of 2021, the scope of Pelleberg, Gentle, and Stahl's plans were uncovered by the Newport Miner. Both Pelleberg's and Gentle's employment was terminated. At the time Gentle worked for the power consulting company GDS Associates which also worked for our PUD-- creating a conflict of interest in Gentle's actions to take down her employers' own client. Gentle's own employment at the PUD had been terminated not long before, which also calls into question some of her motives in attacking her former employer. However, within a few months Stahl provided both Gentle and Pelleberg with lucrative executive positions at the crypto companies he was an executive at (Northern Data and then Merkle Standard). Although he no longer works or resides in Pend Oreille County, Pelleberg is the treasurer of the taxpayer-funded EDC. Gentle is a member of the board of directors of the EDC, an elected POVA commissioner, and recently started a "Clean Energy Coalition" that has alternatively identified itself as a committee of the EDC or as independent organization depending on the meeting. In a recent series of meetings with the county commissioners, Gentle sat across the table from her husband and requested additional taxpayer funds to seek clean energy grants that Commissioner Gentle stated he hoped the county could use to support Bitcoin mining. Rosencrantz proposes County Clean Energy Strategy; Gentle says clean energy grant money should go to bitcoin manufacturing - PROTECT PEND OREILLE Our PUD is the gateway to our economy and the guardian of the cost of living for residents. It is unsettling that some of our public officials and members of the EDC have a history of seeking to undermine the economic foundations of our county and the financial well-being of their neighbors in pursuit of their own fortunes. 
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