House Bill 1416 will Benefit Pend Oreille County​

 A combination of the state’s Clean Energy Transformation Act and prudent actions taken by other PUDs in former crypto counties like Grant, Chelan, and Douglas have made Pend Oreille County a target for crypto miners. Beijing’s Bitmain and its junior partner Allrise, can purchase discounted power from high-pollution sources unavailable in other parts of the state. HB1416 will require Beijing’s Bitmain to switch to cleaner power sources. You can learn more about HB1416 at Washington State Legislature.

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Recently Crypto Bros Monty Stahl and Todd Behrend incorrectly claimed that state House Bill 1416 would harm Pend Oreille County.

The reality is that HB1416 will only affect Beijing’s Bitcoin crypto operations by requiring them to use clean energy—something they have been claiming (falsely) to do anyway. No other industrial, commercial, or residential customer in the county will be affected because every other PUD customer in the county is already paying for clean, renewable energy. Only Beijing’s Bitmain/Allrise is not.

Bitmain/Allrise uses 3x more power than the rest of the county put together. The second largest industrial customer in the county uses less than 2% of Bitmain’s total. Bitmain/Allrise power needs so far exceed our PUD’s electricity generation capacity that they have to purchase their power from the regional electricity market.

Each month they can purchase environmentally tagged power on the market, but they choose not to save a fraction of one cent per kilowatt. 

​Every other PUD customer-owner will benefit financially from this legislation. HB1416 will increase the value of our PUD’s hydroelectricity. Our PUD will receive more for the environmental tags of our energy than they currently receive from their contract with Bitmain. This increase in income will help protect residential customers from rate inflation.  

Bitmain/Allrise Claims Are Misinformation

CLAIM: HB1416 (expansion of the Clean Energy Transformation Act to close current loopholes) will harm business in Pend Oreille County.

FACT: The reality is that HB1416 will only affect Bitmain/Cascade Digital Mining (CDM is the joint venture between Bitmain and Allrise Capital) Bitcoin crypto operations by requiring them to use clean energy—something they have been claiming (falsely) to do anyway. No other industrial, commercial, or residential customer in the county will be affected because every other PUD customer in the county is already paying for clean, renewable energy. Only Cascade Digital Mining is not.
** The cost of the environmental attributes of power for all other PUD customers is captured in their current electricity service agreements. 


CLAIM: Cascade Digital Mining uses green electricity even though they choose not to pay for environmentally tagged power because the high amounts of hydro and wind generated power supplying the grid means CDM must be getting a large proportion of green power.

FACT: This claim is both invalid and dishonest.
  • Electrons generated from renewable sources cannot be disaggregated from electrons from non-renewable sources once they enter the grid (this is the technical basis of CDM’s claim).
  • Because of this CETA relies on accounting methods based on the purchase of environmental “tags” from renewable energy producers at point of purchase to determine how clean, renewable energy is distributed.
  • CDM’s claim is invalid because it violates the state’s methodology for determining green energy usage.
  • CDM’s claim is dishonest because it relies on claiming to use green energy for which environmental tags have been purchased by another customer (i.e., CDM is claiming it can count the green energy twice).


CLAIM: Cascade Digital Mining has been shut out of all options for CETA-compliant power.

FACT: Every month CDM has the option to purchase CETA-compliant power on the market. To date, CDM has declined to purchase CETA-compliant power even though it has been offered to them and is available. Environmentally-tagged power adds a small adder to the purchase price (approximately $4/mwh ($0.004 per kwh)).


CLAIM: The PUD contracting with Clark County to sell the power output of the Box Canyon Dam will harm economic growth in the county.

FACT: Inexpensive power available to the PUD is not a limiting factor on growth.
  • The existing federally mandated assignment of power to the PUD from Boundary Dam will fully support at least 2% growth in our county. It could easily support the addition of at least a half dozen major industrial customers equivalent to Vaagen Lumber.
  • Committing Box Canyon Dam power to Cascade Digital Mining would not increase growth potential in this county because CDM’s needs far surpass Box’s ability to support. The combined BPA allocation and output from Box Canyon is only sufficient to support CDM’s existing bitcoin mining operations.
  • The power factor limiting growth is the maxing out of substations in the county. This limits economic growth potential because new industrial customers would have to pay excessive startup costs to expand the power infrastructure.
  • The revenue to the County from PUD contract with Clark will support economic growth. 


CLAIM: The PUD is violating RCW 54.16.040 by selling Box Canyon Dam power to Shell Energy and, in the future, to Clark County PUD instead of to Cascade Digital Mining.

FACT: The RCW DOES NOT require the PUD to use native loads to support local needs first.
  • The RCW states that PUDs has “with full and exclusive authority to sell and regulate and control the use, distribution, rates, service, charges, and price thereof….”
  • To claim otherwise requires an extremely creative interpretation of the phrase “Provided Further, that it shall first make adequate provision for the needs of the district, both actual and perspective.”
  • The PUD can acquire power for its customers “within or without its limits.”
  • The ongoing operation of Cascade Digital Mining demonstrates that the PUD has made adequate provision for the needs of Cascade Digital Mining.
  • The total generational capacity of the PUD would be insufficient to meet CDM’s current needs, let alone their proposed future needs of 170MW and 600 MW.
  • Allrie/Bitmain/CDM entered into business in the county with full awareness that PUD could not provide sufficient electricity to meet their requirements and demonstrated their intent during 9 months of negotiations with Brookfield Renewables to utilize electricity generated outside of the district.
** The full text of RCW 54.16.040 is provided below

RCW 54.15.040 Electric Energy.
 
A district may purchase, within or without its limits, electric current for sale and distribution within or without its limits, and construct, condemn and purchase, purchase, acquire, add to, maintain, conduct, and operate works, plants, transmission and distribution lines and facilities for generating electric current, operated either by water power, steam, or other methods, within or without its limits, for the purpose of furnishing the district, and the inhabitants thereof and any other persons, including public and private corporations, within or without its limits, with electric current for all uses, with full and exclusive authority to sell and regulate and control the use, distribution, rates, service, charges, and price thereof, free from the jurisdiction and control of the utilities and transportation commission, in all things, together with the right to purchase, handle, sell, or lease motors, lamps, transformers and all other kinds of equipment and accessories necessary and convenient for the use, distribution, and sale thereof: PROVIDED, That the commission shall not supply water to a privately owned utility for the production of electric energy, but may supply, directly or indirectly, to an instrumentality of the United States government or any publicly or privately owned public utilities which sell electric energy or water to the public, any amount of electric energy or water under its control, and contracts therefor shall extend over such period of years and contain such terms and conditions for the sale thereof as the commission of the district shall elect; such contract shall only be made pursuant to a resolution of the commission authorizing such contract, which resolution shall be introduced at a meeting of the commission at least ten days prior to the date of the adoption of the resolution: PROVIDED FURTHER, That it shall first make adequate provision for the needs of the district, both actual and prospective.
 
Source: https://apps.leg.wa.gov/RCW/default.aspx?cite=54.16.040


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