With Vote Approaching Lawsuit Over Bitcoin Mining, Company Shares Information | WJHL

JONESBOROUGH, Tenn. (WJHL) – The operator of a controversial limestone bitcoin mine says it will use quieter technology to cool the mine’s powerful computers – and create six to 10 jobs – if Washington County commissioners approve a move to Washington County Industrial. Park (WCIP).

Those allegations are part of a two-page memo Red Dog Technologies CEO Trey Kelly sent to Washington County District Attorney Allyson Wilkinson on Nov. 16. Wilkinson shared the memo with the 15 commissioners who will vote Monday on whether to approve a settlement in their lawsuit against Red Dog and local utility BrightRidge, which leases land to Red Dog and sells it electricity.

At least one commissioner, who said in a Nov. 3 committee meeting that he wants to see more details about the proposal, said the memo didn’t tell him much he doesn’t already know. The county’s Commercial, Industrial and Agricultural Committee (CIA) recommended in that meeting that the entire commission reject the settlement proposal and send the case back to court.

“At this point, I have not received any new information,” David Tomita told News Channel 11 on Wednesday. “I have heard a lot of repetition of information we have already received, but nothing new. There is really nothing new in that document.”

GRIID provided the two-page memo to News Channel 11 on Tuesday following a request for comment or information on the proposal. It addresses noise issues, power consumption and other issues related to the mine’s impact on other BrightRidge customers, which the memo called “more benefits for us to be in the community.”

The lawsuit has been pending since the parties worked out non-binding settlement terms in June, seeking a closure of the limestone area and claiming that it violates the county’s zoning regulations. The settlement will allow Red Dog, a subsidiary of GRIID Infrastructure, to build a new mine at WCIP if it meets an additional set of conditions.

Noise from fans cooling the limestone mine’s computers fueled the controversy, and Kelly, who is also the executive director of GRIID, addressed noise most thoroughly in his memo. The settlement sets specific noise restrictions, but Telford residents who have vocally opposed a mine at WCIP have cited noise as their biggest concern.

Red dog on noise

“On our new site, we are implementing immersion technology to cool our computers,” Kelly wrote. “When deployed, the sound from our facility will not exceed 60 decibels at the property line.”

Loud noise at the Limestone site drew complaints from nearby residents in the spring of 2021. After Wilkinson and County Planning Director Angie Charles concluded that the mine was operating in violation of county zoning regulations, the county ordered it closed.

BrightRidge, which successfully petitioned for the rezoning that preceded the mine, and Red Dog refused to halt operations and the county sued in November 2021.

That “mine” is a set of power-hungry computers that use massive amounts of electricity as they solve complex mathematical problems to mine new Bitcoin and verify the cryptocurrency’s transactions. Red Dog spent hundreds of thousands of dollars trying to mitigate the noise before the shutdown order and subsequent lawsuit, though the lawsuit focuses more on zoning than noise.

While the noise is not the key to the case, Kelly noted that effort in his memo, saying that despite “significant investments in noise abatement” at Limestone, “we have agreed to move … to resolve the current legal issue .”

Kelly writes that computers at WCIP would be immersed in “an environmentally friendly liquid” in a “closed loop cooling system” that does not require an external water supply. The computers will be inside a building, instead of metal capsules like they are in limestone.

Red Dog on power consumption

BrightRidge CEO Jeff Dykes told News Channel 11 in May 2021 that the main reason the utility partnered with Red Dog was electricity revenue, which he said would help keep other customers’ rates lower. BrightRidge said at the time that Red Dog became the utility’s largest electricity customer virtually overnight, using an amount equivalent to more than 10,000 homes.

While BrightRidge has declined multiple requests to provide specific financial information about the benefit, Kelly wrote that it costs BrightRidge little to operate Red Dog and added this:

“That means fees paid to BrightRidge by Red Dog Technologies help maintain the overall electric system — costs that would otherwise be borne by all ratepayers.”

Kelly also wrote that because Red Dog uses the most power during times of low demand, it poses no risk of outages or intermittent power outages to other customers.

Red Dog on jobs and social benefit

In addition to the benefit from power sales, Kelly wrote that Bitcoin mining is a source of tax revenue for the county. The current mine site was assessed to have “personal property” worth about $7.5 million in 2021, which would generate about $50,000 in county taxes.

Kelly also wrote that at the WCIP site, the mine would provide six to 10 jobs “paying higher than average wages in the county.” The jobs are in areas such as hardware management, technology development and project management.

The county commission meets at 6pm Monday in Jonesborough at the George Jaynes Justice Center.