Cryptocurrency Miners Sue Washington State Utility Over 50 Percent Rate Hike

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Ignorantia Juris Non Excusat (Ignorance of the Law Excuses Not)

A group of nine cryptocurrency companies has filed a lawsuit against Washington State’s Grant County public utility district (PUD) and its commissioners in response to a new phased rate hike that would increase their energy costs by fifty percent.


The complaint, which was filed on December 19, 2018, in the U.S. District Court in Spokane, WA, alleges that the Grant PUD and its commissioners acted “illegally and unconstitutionally” when they voted to enact a new higher rate classification in August of last year.

During a meeting held on January 8th, utility officials agreed that Grant PUD would cover the legal defense costs for commissioners Tom Flint, Dale Walker, and Larry Schaapman, former commissioners Terry Brewer and Bob Bernd, and 10 unnamed Grant PUD employees.

According to the court document, the nine cryptocurrency firms suing Grant PUD are:

  • WeHash Technology LLP
  • 509 Mine LLC
  • Corsair Investments WA LLC
  • Miners United LLC
  • MIM Investors LLC
  • TELCO 214 Wholesale Software Inc
  • Blocktree Properties LLC
  • Cytline LLC
  • Mark Vargas (majority managing member of Mission Valley Mining, LLC)

They are being represented by Eric Christensen and Jonathan Tebbs from the law firm of Cairncross & Hempelmann, P.S.

Energy Price Hikes for Crypto Miners

Energy Price Hikes for Crypto Miners

Grant PUD serves approximately 50,510 customers throughout the county and, since summer 2017, has been inundated with new service requests for more than 2,000 megawatts of power, according to iFiberOne. The majority of those requests – roughly 75 percent – have come from crypto miners.

To put it in perspective, 2,000 megawatts is enough electricity to power all of the homes, farms, and businesses in Grant County more than three times over.

In response to the significantly higher energy consumption of crypto mining companies in the region, on August 28, 2018, Grant PUD’s commissioners voted unanimously to adopt a new Class 17 rate for “evolving industries”, under which crypto mining businesses are classified.

The new rate will be rolled out in stages over the course of the next three years. On April 1 of this year, customers under the “evolving industries” classification – also known as Rate 17 customers – will see their electricity costs go up by 15 percent, followed by a 35 percent increase in 2020 and a 50 percent increase in 2021.

Commissioner Tom Flint told crypto miners who attended the August meeting:

Your industry is unregulated and high-risk… This is the best way to ensure our ratepayers are not impacted by this unregulated, high-risk business.

Grant PUD officials declared at the time that cryptocurrency miners and other “evolving industries” present three areas of risk for the utility:

Regulatory Risk. They are vulnerable to potential changes in regulation that could render the industry unviable within the foreseeable future.

Business Risk. They are an unproven industry with higher potential for cessation due, in part, to large swings in the value of their primary output.

Concentration Risk. They pose the potential for significant concentration of electrical load and revenue risk to Grant PUD if one or all stop operating in a short period of time.

With regard to the lawsuit, the utility released a statement on Thursday noting that they are aware of the litigation and intend to file their response to the complaint by the end of the month.

Are these companies right to sue Grant PUD or do you think that cryptocurrency miners should have to pay a higher rate for electricity? Sound off in the comments below.


Images courtesy of Shutterstock, DepositPhotos

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