Communities consider cryptocurrency challenge

MOSES LAKE — New technologies and businesses present new challenges, as the arrival of cryptocurrency has demonstrated.

Cryptocurrency is a kind of virtual money, of which Bitcoin is the best-known example. The transactions are encrypted, and the encryptions regulate the system. People who break the code get the currency.

The process is called cryptocurrency mining. The computers do all the work, but the work required puts a lot of demands on the computers. And that has had effects down the line, which have required responses from communities and utilities.

Sometimes cryptocurrency mining has required actual responses, like to actual fires. Derek Beach, Moses Lake fire marshal, said the MLFD has responded to five incidents that involved cryptocurrency mining, four of them at what he termed commercial sites.

The cryptographic attack on the cryptocurrency requires a lot of computing power, and in a lot of cases, that means computers working 24 hours per day. Residential and most commercial systems aren’t equipped to handle the power demands, Beach said.

Most houses have a theoretical capacity of 200 amps of electricity, Beach said, but they’re not designed to handle 200 amps all the time. “Even a heater has a thermostat,” he said. Depending on its size, the cryptocurrency mining system can overtax the existing electrical capacity. “No peaks and valleys” in electrical usage, Beach said. “That’s where we get the fires.”

Moses Lake city officials have proposed a moratorium on granting permits for cryptocurrency mining operations, which will be considered by the Moses Lake City Council at its May 22 meeting. City officials will be working on a longer term solution, said community development director Gil Alvarado.

Ephrata city administrator Wes Crago said the city’s zoning ordinances include provisions that govern businesses like cryptocurrency mining. Currently there are three businesses operating under the permits, Crago said.

Grant County development services director Damien Hooper said as far as county officials are concerned, cryptocurrency mining fits in the same category as data centers. “Those uses have a fairly limited window where they can reside,” Hooper said, in industrial and commercial zones. The county has had a lot of inquiries from potential cryptocurrency operations, but only one has gone through the permitting process. It’s under construction now on East Grape Drive in Moses Lake.

The relatively low-cost electricity in Grant County has attracted the attention of a lot of cryptocurrency miners. Since summer 2017 the PUD had requests for more than 2,000 megawatts of new service, according to a PUD press release. “This is more than three times the electricity needed to power all Grant County homes, farms, businesses and industry,” the press release said.

The PUD imposed a moratorium on new customers in certain rate classes while its employees researched options. Employees recommended, and commissioners approved, a new rate class at Tuesday’s commission meeting.

Businesses will be put in the “evolving industries” class if they meet certain criteria, including evaluation of their long term prospects and revenue streams. Businesses in that class also will be required to pay some upfront fees.

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