Risk, revenue discussed at Grant PUD workshop

EPHRATA — Jobs, revenue and risk were among the topics during a wide-ranging discussion of a proposed new Grant County PUD rate class at a commission workshop Tuesday.

The new “evolving industries” class was prompted by a dramatic increase in the number of requests for new service in summer and fall 2017. Many came from companies and individuals involved in cryptocurrency mining. The requests would substantially increase demand on the PUD’s supply, which prompted a reassessment of rates and rate classes.

Cryptocurrency can be a large commercial operation, or it can be set up in a residential area, like a shed. Under the current proposal, the basic electricity charge for Class 17 (evolving industry) customers in residential areas would be $1.04 per day, plus 13.7 cents per kilowatt hour.

For Class 17 customers that use more than 200KW per hour, the basic charge would be $1,000 per month and 7.09 cents per kilowatt hour. Those customers also would pay a demand charge, $6 per kilowatt during the billing period.

The proposal prompted protests from existing cryptocurrency operations in the county, who said the new rate would make it harder to do business. After hearing from them, commissioners asked for additional information.

The original proposal was for implementation by Oct. 1. But Jeremy Nolan of the PUD’s accounting department said employees now are recommending a phased-in implementation over three or four years.

Nolan said PUD employees had been asked questions about the number of jobs generated through cryptocurrency operations, as well as jobs generated by data centers. He cited a study done for Hydro Quebec, which showed traditional industries generate the biggest number of jobs per kilowatt hour. Data centers generated anywhere from five to 25 jobs per kilowatt hour, depending on the kind of work done there, while cryptocurrency operations, depending on their size, generate anywhere from one-half a job to a little more than a whole job per kilowatt hour. There is the potential for more jobs as the industry grows, Nolan said.

Currently most cryptocurrency operations are in Class 7, and Nolan said he was asked what would happen to revenue if the cryptocurrency operations left the county. The PUD would have the opportunity to sell the power on the wholesale market. The best estimate, Nolan said, was that the PUD would lose about $1 million of that revenue in 2019 and 2020.

Devon Williams, the PUD's risk manager, said the analysis showed that filling all current requests would force the PUD to expand its distribution system about five years earlier than expected, with the attendant costs. In answer to a question from commissioner Bob Bernd, Devin said the analysis assumed most Class 17 customers would be near existing high-speed internet connections, but chief executive officer Kevin Nordt said new – and expensive – expansion would be required regardless.

An expanded system would serve other customers, Williams said, so the projected cost of expansion was not entirely allocated to cryptocurrency customers.

Cheryl Schweizer can be reached via email at education@columbiabasinherald.com.