JONESBOROUGH, Tenn. (WJHL) — The operator of a controversial Limestone Bitcoin mine says it will use quieter technology to cool the mine’s high-powered computers — and create six to 10 jobs — if Washington County commissioners okay a move to the Washington County Industrial Park (WCIP).
Those claims are part of a two-page memo Red Dog Technologies’ CEO Trey Kelly sent to Washington County attorney Allyson Wilkinson Nov. 16. Wilkinson shared the memo with the 15 commissioners who are set to 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 power.
At least one commissioner, who said in a Nov. 3 committee meeting he’d like to see more specifics about the proposal, said the memo didn’t tell him much he doesn’t already know. The county’s Commercial, Industrial and Agricultural (CIA) committee recommended in that meeting that the full commission deny the settlement proposal and send the matter back to court.
“As of this moment I have received no new information,” David Tomita told News Channel 11 Wednesday. “I’ve heard a lot of reiteration of information we’ve already been given but nothing new. There’s really nothing new in that document.”
GRIID provided the two-page memo to News Channel 11 Tuesday after a request for comment or information on the proposal. It addresses noise concerns, electricity consumption and other questions related to the mine’s impact on other BrightRidge customers, and what the memo called “multiple benefits to us being in the community.”
The lawsuit has been on hold since the parties drafted non-binding settlement terms in June, seeks a shutdown of the Limestone site and alleges it violates the county’s zoning ordinance. The settlement would allow Red Dog, a subsidiary of GRIID Infrastructure, to build a new mine at the WCIP if it meets an additional set of conditions.
Noise from fans that cool the Limestone mine’s computers led to the controversy, and Kelly, who’s also CEO of GRIID, addressed noise most thoroughly in his memo. The settlement sets specific noise limitations, but Telford residents who have vociferously opposed a mine at the WCIP have cited noise as their top concern.
Red Dog on noise
“At our new site, we are implementing immersion technology to cool our computers,” Kelly wrote. “Once 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 the mine was operating in violation of the county’s zoning ordinance, the county ordered it shut down.
BrightRidge, which petitioned successfully for the rezoning that preceded the mine, and Red Dog refused to cease operations and the county sued in November 2021.
That “mine” is a set of power-hungry computers that use massive amounts of power as they solve complex mathematical problems to unearth new Bitcoin and verify the cryptocurrency’s transactions. Red Dog spent hundreds of thousands of dollars to try and mitigate the noise prior to the shutdown order and subsequent lawsuit, although the lawsuit focuses more on zoning regulations than noise.
Although the noise isn’t key to the suit, Kelly noted those efforts in his memo, saying that despite “significant investments in noise reduction” in Limestone, “we have agreed to relocate … 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 doesn’t require an external water supply. The computers would be inside a building, rather than metal pods like they are in Limestone.
Red Dog on power usage
BrightRidge’s CEO, Jeff Dykes, told News Channel 11 in May 2021 that the main reason the utility partnered with Red Dog was for power revenue, which he said would help keep other customers’ rates lower. BrightRidge said at the time that Red Dog became the utility’s biggest power customer practically overnight, using an amount equivalent to more than 10,000 homes.
Red Dog Tech Memo From Trey Kelly by Jeff Keeling on Scribd
While BrightRidge has refused several requests to provide specific financial information about the benefit, Kelly wrote it costs BrightRidge little to serve Red Dog and added this:
“That means fees paid to BrightRidge by Red Dog Technologies help maintain the overall electrical system — costs that would otherwise be borne by all ratepayers.”
Kelly also wrote that because Red Dog uses the most power during low-demand times, it doesn’t pose any danger of brownouts or intermittent outages to other customers.
Red Dog on jobs and community benefit
In addition to the benefit from power sales, Kelly wrote that the Bitcoin mine is a tax revenue source for county government. The current mine site was assessed to have about $7.5 million worth of “personal property” in 2021, which would yield about $50,000 in county property taxes.
Kelly also wrote that at the WCIP location, the mine would provide six to 10 jobs “that pay higher than county average wages.” The jobs are in areas such as computer hardware management, technology development and project management.
The county commission meets at 6 p.m. Monday in Jonesborough at the George Jaynes Justice Center.