JONESBOROUGH, Tenn. (WJHL) — After gaining significant concessions from the original, Washington County commissioners narrowly approved a lawsuit settlement that will see a controversial Bitcoin mine in Limestone shut down no later than the end of 2024 and likely earlier.
Commissioners voted 8-2 with five absent to send the amended settlement — which allows Red Dog Technologies to build a new mine at the Washington County Industrial Park — to Red Dog co-defendant BrightRidge’s board, which meets at noon Friday.
If the proposal passes there, it will end the lawsuit filed in November 2021. Washington County sought shutdown of the mine next to a BrightRidge substation on Bailey Bridge Road in the rural New Salem community, claiming it violated zoning laws.
Red Dog, which is owned by a Bitcoin mining company called GRIID, had joined the suit as a defendant. A trial was set for July 11-13.
Washington County commissioners didn’t mince words Thursday with Trey Kelly, GRIID’s CEO. Kelly made his first appearance before commissioners, who began demanding noise at the mine be addressed about a year ago.
When commissioners were through expressing their displeasure with the way Red Dog handled the past 10 months, they requested a recess to address concerns with the original proposal. When lawyers for both sides emerged more than 30 minutes later, GRIID had agreed to every concession.
Key settlement points
- Red Dog shuts down Limestone Bitcoin mine within six months of “energizing” first units at its new industrial park location, or no later than Dec. 31, 2024, whichever comes earlier;
- The new mine location has ongoing independent noise monitoring with penalties for readings above 60 decibels;
- GRIID pays the county $35,000 per acre for a 5-acre new site (up from $20,000), $500 a day retroactive to September 2021 and through the closure of the Limestone mine;
- BrightRidge extends high-speed internet to 51 homes within a half-mile radius of the existing mine and covers the cost for as long as the mine is there but no less than a year.
“A year ago I felt insulted by Red Dog representatives,” commissioner Bryan Davenport said as Kelly stood before commissioners.
“We weren’t told the truth about what would happen,” Kent Harris said. Harris would later cast one of the two ‘no’ votes.
“Part of me wants to ask, ‘where were you a year ago,'” Freddie Malone said, adding that he “definitely would not call the process we’ve been through transparent.”
Loud noise from fans at the site first triggered residents’ complaints in the late spring of 2022. Those fans cool high-powered computer equipment that verifies Bitcoin transactions and “mines” for new Bitcoin, a digital cryptocurrency.
Kelly spoke directly to those residents for the first time Thursday. He said GRIID “didn’t foresee” the problems that occurred at the Limestone site.
“I wanted to first and foremost introduce myself, sincerely kind of apologize for the heartache and inconvenience it’s created for all of us, and thank you for your time and consideration,” Kelly said.
Malone first brought up the possibility of addressing several concerns Thursday night. He said he was concerned about GRIID exploiting “loopholes” in the proposal and dragging out the process of shutting down the New Salem mine.
Once other commissioners added their concerns, the main sticking points came down to three primary areas. One was a fear that Red Dog would drag out its presence at the Limestone mine until the latest possible date in the original settlement — April 2026.
Another concern was how enforceable would be a 60-decibel noise limit at the new site, which does have some homes nearby. In fact, Harris said prior to the recess “when people down there read about this tomorrow, they’re going to go berserk considering all the problems this one has caused.”
The other concern was a perceived lack of GRIID/Red Dog paying much for the damage that had already been done. The initial proposal would have Red Dog pay $500 a day damages from its approval through the shut down of the mine. Davenport questioned whether that was punitive enough.
“Our zoning administrator said last June this mine violated our zoning ordinance,” he said. “Our county attorney agreed. You’ve operated and made money from this for a year. You’re paying going forward — maybe we should make it right going backward.”
Attorney Jeff Ward, who has helped county attorney Allyson Wilkinson litigate the lawsuit, told commissioners and residents before commissioners questioned Kelly that in mediation “a good settlement is one that nobody’s totally happy with because everyone is giving up something.”
But when Ward walked out of the renegotiation a couple hours later, commissioners had much more to be happy with (see list above). The county will make about $130,000 more in penalties than it would have, and make $75,000 more off its land sale to GRIID.
New Salem residents will likely have the mine shut down earlier than it would have, and the latest date it could shut down is 15 months earlier than it was.
And neighbors around the new site, which will be equipped with entirely new mining rigs, will be even further protected against noise nuisance than they would have been.
The 51 households within a half-mile radius of the current facility will get high-speed BrightRidge internet extended to their homes and get at least a year of it for free.
Roger Drake lives in a neighborhood in Lamar that’s near another substation BrightRidge was considering for hosting a GRIID mine site when the controversy first erupted. He spoke of his concern for the Bailey Bridge residents and said because insufficient due diligence was conducted, “we found thorns among the roses” of what had been promised.
After the settlement proposal’s presentation, though, Drake expressed a change in his own attitude.
“I’ve been strong in this but I’m hearing a conciliatory attitude and congratulate you for this,” Drake said. “I hope a level of trust has been established that we’re attempting to solve these problems in a rational manner.”
Earlier story
A proposed lawsuit settlement would end in the closure of a controversial Bitcoin mine in rural Washington County, with a new location proposed in the county’s industrial park.
Washington County commissioners entered a closed session after County Attorney Allyson Wilkinson read the proposal’s details before returning to discuss it in front of a dozen or so people who live near the mine.
The county sued BrightRidge, the local electric utility, in November over the presence of the mine operated by Red Dog Technologies. The suit alleges the mine violates zoning regulations and that it began operating without a permit and seeks shutdown of the mine, which has a lease with BrightRidge through 2025.
BrightRidge supplies the power for the mine from an adjacent substation on Bailey Bridge Road and Red Dog is the utility’s biggest customer, with 25 megawatts of demand.
As they have for months, several residents expressed their insistence that the only acceptable outcome is the mine’s closure.
“The only thing we’ll accept is for it to be gone,” New Salem Baptist Church pastor Craig Ponder told commissioners. He said the pastoral community “has had next to zero benefits from the Bitcoin mining place. The only thing we’ve reaped is noise and pollution and decreased property values.”
They learned closure was part of the proposal, which Red Dog parent company GRIID has already approved. GRIID announced in late 2021 its plans to go public and its agreement with Intel for a supply of new-generation chips specifically designed for high-efficiency crypto mining.
Other details shared by Wilkinson included that:
- The old site would have to be shut down within nine months of the new one going live;
- Decibel level outside the five-acre new site’s property line wouldn’t exceed 60 decibels;
- Tennessee Valley Authority (TVA) would have to approve transference of the existing power contract to the new site, or else Red Dog could continue operating at New Salem until its initial lease expires in spring 2026;
- BrightRidge would extend high-speed internet to 51 homes within a half-mile radius of the existing mine and cover the cost for as long as the mine is there but no less than a year;
- Once the agreement is approved, Red Dog would pay the county a $500 daily penalty until shutdown, with the first year prepaid in a lump sum;
- Red Dog would buy 5 acres in the industrial park from the county for $20,000 per acre, closing in this calendar year.
The 10 commissioners present (out of 15 total) remained in executive session at 6:45 p.m.
This is a developing story. Look for updates on WJHL.com.
