Blockchain mining requires enormous amounts of electricity. Electricity costs money. Blockchain mining is thus enormously expensive from an electricity standpoint.
Grant County PUD No. 2 (PUD) generates a lot of cheap electricity through its hydroelectric dams on the Columbia River. That has historically made Grant County an attractive place for blockchain miners to set up shop. The past few years have seen a massive influx of large-scale mining operations. The influx—and the corresponding problems it has created for local communities—has been well-documented.
Faced with skyrocketing demand for its electricity and increased strain on its infrastructure, the PUD took action. Last year, it created a new rate class for businesses in “evolving industries.” The new rate is considerably higher than the rate paid by ordinary business and residential customers.
The blockchain miners were predictably upset. Several banded together to challenge the new rate class in a lawsuit filed last December. Their complaint alleges that creating a new rate for businesses in “evolving industries” was arbitrary and capricious and violates due process.
The PUD filed a motion for summary judgment today. A hearing has been scheduled for June 27, 2019, in Spokane.
The plaintiffs were denied a preliminary injunction two months ago, with Judge Peterson questioning whether they were likely to succeed on the merits. That would seem to bode well for the PUD on summary judgment. On the other hand, it seems clear that the PUD singled out blockchain miners for higher rates. It will ultimately need to show that it had the legal authority to do so.
UPDATE 6/11/19 — Judge Peterson has deferred a ruling on the PUD’s summary judgment motion under Rule 56(d) to afford the plaintiff an opportunity to take discovery. A new hearing date has not been set.
The case is Blocktree Properties, LLC, et al. v. Public Utility District No. 2 of Grant County, Case No. 18-CV-0390-RMP.