Chelan County PUD to enforce ‘rogue’ bitcoin moratorium

The measure is aimed at “scoundrels” trying to thwart the rules surrounding cryptocurrency mining.

  • Nevonne Mcdaniels The Wenatchee World, Wash.
  • Tuesday, April 3, 2018 12:52pm
  • BusinessNorthwest

By Nevonne McDaniels / The Wenatchee World

WENATCHEE — Chelan County PUD staff now have the go-ahead to enforce the bitcoin moratorium and prevent unauthorized cryptocurrency mining activities.

Enforcement measures include:

• Fees and penalties already on the books, with more being proposed.

• Service disconnection.

• Report to law enforcement for investigation of power theft and to fire officials for public safety violations.

The enforcement measures outlined and approved Monday by PUD commissioners follow the March 19 decision to immediately stop taking new applications for high-density load (HDL) operations that require large amounts of electricity.

The moratorium was called to give staff time to develop a plan for how to address everything from safety risks such as damage to transformers from overloaded electrical systems, to noise, aesthetics, staff costs and infrastructure costs.

The push for enforcement in the wake of the moratorium is aimed at “scoundrels” trying to thwart the rules, said PUD Commissioner Garry Areseneault.

“What we’re discussing is a person who is purposely trying to slip around the end and use power in a way that a facility was not designed for and doing so in a manner where there’s been no request for service to meet that kind of demand,” he said.

PUD staff identified more than 28 unauthorized cryptocurrency mining operations throughout the county. Nineteen of them were shut down in March.

Three more were identified and shut down last week — at an apartment in Wenatchee, a house in Malaga and a mini storage unit in Chelan.

Staff reviewing meter readings saw power use at the Wenatchee apartment jump from a typical 500 kilowatt hours (kwH) to 11,000-plus kwH. PUD staff checked the location, found the balcony door and windows open, likely to help cool the cryptocurrency mining equipment. Investigation showed no one was living in the apartment.

In Malaga, the homeowner was told his mining operation was illegal and talked with staff about options for legal service, but continued to mine without following through until crews disconnected service. In Chelan, an approved operator expanded his operation beyond the allowed power amount without required notification.

At the April 16 board meeting, PUD commissioners will consider implementing additional fees, as proposed by staff, to cover costs of investigation and enforcement of the HDL rate for unauthorized operations and for the loss of useful life for overtaxed equipment. The fees could total about $5,000 for unauthorized operations in residential areas and $7,000 to $10,000 in commercial space.

A public hearing on whether to continue the moratorium is set for 1 p.m. May 14.

Chelan County and the cities of Wenatchee, Chelan, Leavenworth and Entiat also have called or are considering moratoriums on blockchain startups while zoning issues can be addressed. East Wenatchee adopted interim zoning controls that restrict the operations to the city’s central business district. Douglas County commissioners are expected to discuss the issue as well.

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