JONESBOROUGH, Tenn. (WJHL) — Washington County is on the verge of limiting Bitcoin and cryptocurrency “mining” to the county’s industrial park in Telford.

County commissioners learned Monday of a proposed “text amendment” to the county’s zoning resolution that would create a “Cryptocurrency Mining District” at the Washington County Industrial Park (WCIP).

County Attorney Allyson Wilkinson said the change is separate from a proposed settlement agreement in the county’s lawsuit against BrightRidge and Bitcoin mining company Red Dog Technologies. But she said it’s necessary if that settlement is to go forward, as well.

A map showing 7 acres (with red border) in the Washington County (TN) Industrial Park proposed for a Bitcoin mine as part of a lawsuit settlement being considered by county commissioners. (Courtesy Washington County)

The settlement would see Red Dog build a new Bitcoin mine on seven acres in the WCIP, and in turn close the Limestone mine that’s the subject of the lawsuit. She said the text amendment was among the matters discussed when attorneys for all sides met on Oct. 21.

“It is the most restrictive that it could be under certain legal circumstances and considerations, and you will find that it creates a district,” Wilkinson told commissioners Monday night. “It is not then a zoning that it would be all over the county.”

The draft pulls no punches about what county staff members found as they researched crypto mining. Bitcoin mines are comprised of powerful computers whose graphics processors perform complex algorithms in a race to “mine” new Bitcoin and also verify the cryptocurrency’s transactions.

Loud fans used to cool the computers created the original controversy surrounding the Limestone mine, which Wilkinson and County Planning Administrator Angie Charles later determined was in violation of the zoning ordinance.

The draft states that staff determined crypto mining’s impacts can include substantial energy consumption, noise and electronic waste. “(R)egulation is necessary to protect the public health, safety, and general welfare of the citizens of Washington County,” it reads.

It calls the mining “a relatively new industry not presently included in the (zoning) code.”

The draft language that would be added to the county’s zoning resolution says the district’s creation is intended to establish areas for businesses that “unless closely regulated, might cause a detrimental effect upon and be injurious to the resources, development, and the health, safety and welfare (of) surrounding areas or Washington County as a whole.”

The specific draft language specifies that any cryptocurrency mining facilities “shall be” located in the WCIP and be at least 5 acres. They also cannot be adjacent to a residential district.

The draft sets a sound limit at the property lines of the mines not to exceed 60 decibels. It requires that a user verify all e-waste it generates is handled by a licensed e-waste recycling firm. And it prohibits any operation from housing its computers or other equipment in cargo containers, railroad cars, semi-truck trailers “and other similar storage containers.”

Instead, the rules allow only “specialty noise-reducing structures” designed to accommodate the operation, as well as an enclosed noise-reducing fence, wall or screen.

“You will note, and I think it’s important for you to note that it is restricted and that’s what we discussed as recently as Friday,” Wilkinson told commissioners.

The regulation would also require a utility provider (presumably BrightRidge) that it’s calculated potential electrical consumption and verified that its equipment and related infrastructure can safely accommodate the proposed operation.

BrightRidge actually sought and gained a rezoning of the Limestone property next to its Bailey Bridge Road substation in February 2020. The utility said Red Dog is its biggest power customer, using enough electricity to power more than 10,000 homes, and cited that as a primary reason it struck an agreement with the company initially.

Red Dog leases several acres of BrightRidge land adjacent to the Limestone substation — land BrightRidge purchased in January 2020.