WASHINGTON COUNTY, Tenn. (WJHL) – Residents of the pastoral New Salem community say a bitcoin mining center next to a Brightridge power substation has seriously impacted a prized element of their quality of life — peace and quiet.
“When we lay down and all, the TV’s off and the kids are in bed, the noise is there,” said Preston Holley, a school teacher whose home is just across Lola Humphreys Road from the site. “It’s as plain as day. When wake up to let the dog out it’s running full bore.”
Cooling fans from the round-the-clock operation off Bailey Bridge Road are so loud they sometimes keep residents up at night. But the massive computing power in what Brightridge CEO Jeff Dykes said is about a $10 million operation has made Red Dog Technologies the power distributor’s biggest customer virtually overnight.
That’s created a conundrum for Brightridge, Dykes said. A new customer that at scale will use enough electricity to power almost 10,400 homes will bring much-needed revenue in an age of declining usage as home and commercial customers become more efficient — but one that so far has a noise problem.
“As we have reduced usage and we have lower revenues coming in then this helps offset that and reduces rate pressures later, so from that standpoint it is a tremendous help on that side,” Dykes said.
He said Bitcoin mining outfits like Red Dog seek out inexpensive power, primarily in rural communities, as they look to locate new operations. The Tennessee Valley is a popular target as it checks both boxes in much of its service area.
Even Dykes didn’t anticipate the noise level the Bailey Bridge operation, where construction continues, would create. He and other leaders visited a Red Dog data mine in Maynardville (the company was called GRIID at the time).
He said the sound wasn’t the same at the operation that partners with Knoxville Utilities Board (KUB).
“I would say not at the level that it’s at,” Dykes said.
“If you went to the KUB one had more wood structures around it, this one is more of a metal thing and I think that is something that may have caught them off guard too as far as the creating more noise.
“And that’s why they’re looking to mitigate that more and more every day,” Dykes said. Among the current proposed fixes are a 300-foot-long, nine-foot-high fence, he said.
Craig Ponder pastors New Salem Baptist Church. The former Navy flight meteorologist said the cryptocurrency mine’s sound brings back memories.
“To me it truly sounds like a jet in our back yard sitting on the tarmac spinning up ready for takeoff at times,” Ponder said. “It’s worse at night.”
Dykes said that’s because Red Dog is taking advantage of “off-peak” power. As a large user, it can get lower rates for using power in the middle of the night when demand is low – but when it’s still advantageous for the Tennessee Valley Authority (TVA) to leave power stations on at a low “baseload” rather than shutting them off and firing them up again the next morning.
“This allows TVA to keep a lot more equipment baseloaded so that way they can use that power and not have that excessive cost of ramping that facility back up from a cold start,” Dykes said.
When this process started, he said TVA was involved in those discussions with GRIID, “looking at the technical side of it and what usages they would have, the same at KUB and here.”
Community members say communication ahead of time was lacking
Preston Holley built his house on family farmland. He said he called Brightridge once after construction began but didn’t get any information.
Ponder said his curiosity got the best of him.
“I stopped one of the construction guys and he told me it was bitcoin and mentioned it was gonna be all computer banks,” Ponder said.
The church is about a half-mile from the substation as the crow flies, but Ponder said that’s not far enough to be noise-free.
“I’ve had numerous people walk up on the porch Sunday morning at 10:30, 11 o’clock, ‘pastor what is that noise?’ Because it sounds like a combine. Sounds like they’re off in the fields plowing or something on a Sunday morning.”
One noisy night in early May Ponder said he’d had enough.
“With my windows closed, doors closed, TV on it just kept getting louder and louder and I stepped on the back porch at the house and caught a little video on my phone,” he said. “Maybe my first Facebook rant.”
Ponder said a Brightridge engineer actually came to his home the next day to try and explain the situation. He told Ponder about peak power usage being from 2-8 p.m., at least in the spring and fall, and that highest usage would be at night.
Ponder said the worker was nice and definitely attempting to be helpful, but that didn’t change the situation on the ground.
“We feel like we’ve got an invading army that’s moved in our back yard and seem like there’s not much we can do about it,” he said.
Ponder said Red Dog’s investment and the benefit to Brightridge leave him with no illusions that the Bitcoin mine will be leaving anytime soon. The company has a five-year renewable lease at the site. But he hopes Dykes’s comments about Red Dog wanting to be a good neighbor pan out.
“Just some kind of help with the sound,” he said. “And I would definitely feel for the communities if there are communities that are facing this, hopefully we can cut it off at the head before other communities have to put up with what we’re dealing with.”
For his part, Holley would certainly like to see some noise mitigation that’s actually effective, but he also thinks Brightridge and Red Dog could think outside the box about ways to be good neighbors now that the die has been cast.
“The quality of life, the value of our community needs to be acknowledged,” Holley said. Regardless of where you put a facility like this.”
Brightridge has touted its fiber rollout as well as wireless high-speed internet it’s begun offering in some of its rural areas. It hasn’t reached New Salem and Holley said expediting that rollout near the Bitcoin mine would be a meaningful gesture.
“When we have a lot of kids doing homework and during our virtual period, it was iffy, many times,” Holley said of his family’s internet service. Cable isn’t available though a trunk line is a quarter-mile away along Bailey Bridge.
“There are many, many ways they could benefit the community here and if these facilities are going to go in and Brightridge is benefiting, and Brightridge is here for the community there should be more opportunities for the customers to see savings or services of some sort — especially when we are inconvenienced in this way.”
Near another substation, forewarned is forearmed
With Bitcoin’s popularity still strong, Red Dog is looking to grow. Dykes said Brightridge has strongly considered completing a request for proposals (RFP) to host a second mine — this one adjacent to a substation near the intersection of Tennessee Highway 81 and Greenwood Drive in the Lamar community.
Dykes said multiple suitors are in that contest — and he added that Brightridge doesn’t want to get crossways with neighbors, at least not a second time. But he said relatively low current demand on that substation makes it a viable option for yet another major boost to the revenue he said power distributors need to keep paying for infrastructure and providing new services for customers without jacking rates sky high.
The average home cited by Brightridge uses 1,300 kilowatt hours of electricity per month. A fully operational Bailey Bridge site would use 13.5 million kilowatt hours a month.
Dykes said the Lamar site could get even bigger if it came to fruition, but according to at least one person in that neighborhood, it won’t happen without a fight.
New Salem residents didn’t know what was coming at Bailey Bridge and they didn’t oppose a rezoning at the site, but Roger Drake said that won’t be the case with any Lamar operation that would reach that point.
“They’re honest businessmen, I just don’t want them to do business in my back yard,” said Drake, who owns a home and 20 acres on nearby Mayberry Road. “I don’t want to hear it.”
Beyond concerns about a noise nuisance in a community that’s more densely populated than New Salem, Drake said he’s concerned about wildlife getting run out of the area by the noise.
“The songbirds are gonna leave,” Drake said. “The squirrels, the rabbits, the deer, the turkey.”
Drake displayed a petition signed by close to six dozen neighbors. He said they’ll be heading to the Washington County Commission May 24 — some New Salem residents are planning to go, too — to voice their opposition to any further Bitcoin mining centers.
“We’ve got 60 or 70 signatures of people who are voters, taxpayers and property owners in this immediate area, and we don’t want it.”
He said he understands Brightridge’s position.
“They (Red Dog) came here to take TVA power and it’s good business. It’s cheap, it’s good business, and the power board wants to sell, that’s good business.”
But he doesn’t plan to change his stance.
“We think that when the project at Bailey Bridge was approved no one understood the consequences,” Drake said. “The people down there didn’t fight the zoning because they were told it was going to be a solar panel farm with some data machines.
“We’re gonna fight any change of zoning tooth and nail. We are gonna stop this if we possible can. We may not get it done, but we’re gonna have at it.”
Dykes said he understands customers’ concerns, but said the benefit of a massive revenue boost at the very least makes trying to overcome the initial bumps well worth it.
“It’s a learning process,” he said. “There are numerous of these companies out there but these, they’re learning day by day and improving.
“They are looking at opportunities to help muffle the sound … past just this one fence they’re putting in,” Dykes said.
“They want to one be a good community member and they also want to do these at other places, whether it be Brightridge or any of the other utilities around here that would love to have the additional load.”
Brightridge gave News Channel 11 Red Dog spokesman Ed Medford’s contact information. Medford did not respond to two text messages — one Friday, one Monday — or a Monday voicemail message.