As of Monday, May 7, 2018
OKANOGAN A moratorium on high-density electrical load – aimed at addressing cryptocurrency mining facilities – was extended April 23 by the Okanogan County Public Utility District commissioners.
A public hearing on the moratorium, imposed March 5, was held. It precludes the PUD from accepting any new electric service load applications that have energy use intensity of more than 250 kilowatt-hours per square foot of space per year.
Director of Power Resources and Broadband Services Ron Gadeberg presented information on high-density load considerations. Staff’s recommendation was to extend the moratorium to allow for planning time to assess load increases that will have substantial policy, operational and cost implications, the board said.
Commissioners requested additional information on the consequential effect on the system and the direction of the power industry as a whole on the matter.
The moratorium was extended, with another public hearing planned on or before Sept. 5.
Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Trading is done online.
“Mining” bitcoin, one type of cryptocurrency, requires huge amounts of electricity, making north central Washington attractive because it has the cheapest electricity in the nation, thanks to its hydroelectric dams.
In late December 2017, Canadian company Atlas Cloud Enterprises Inc. announced it had purchased a 6,600-square-foot building in Electric City for bitcoin mining and use as a blockchain business. A blockchain is a publicly distributed ledger in which cryptocurrency transactions are verified.
Atlas Cloud plans to purchase three to five megawatts of electricity per year from the Grant County Public Utility District.
The company said 80 percent of the three megawatts of dedicated power would allow it to host up to 1,700 application-specific integrated circuit mining servers. A second phase, slated for completion in 2019, would increase total energy dedicated to the operation to five megawatts.
Right after the announcement, Tara Lee of Gov. Jay Inslee’s office told The Chronicle that bitcoin mining “is an emerging sector of the technology and finance sectors and there is increasing market demand for facility space across the country for new digital currency operations such as this one. These types of firms are attracted to Washington state due to our competitive power rates, but this is truly a global industry.”
Atlas Cloud President Fred Stearman echoed that, saying Washington “is an excellent jurisdiction with its access to abundant, inexpensive electricity, good governance and a cool climate important for economic server operations.”
A bill establishing digital currency regulations was passed by the Legislature in 2017. Every digital currency exchange with Washington customers must operate under the state’s money transmitter laws and must be licensed by the state Department of Financial Institutions.
Bitcoin was classified as a commodity in September 2015 by the U.S. Commodity Futures Trading Commission and, according to the IRS, is taxed as a property.
As of May 7, one bitcoin was valued at $9,329.64, down from the March 11 value of $9,586.04. On Jan. 3, shortly after Atlas Cloud’s announcement, the value was $15,099, but by Jan. 8 the value had fallen to $14,999.99.