Cryptocurrency miners struggle to stay in business after state denies permits

DRESDEN — The owners of a controversial cryptocurrency mine/gas-fired power plant in the Finger Lakes are suing the state, alleging it denied them an air emissions permit that would have allowed the facility to continue operating.

Without the permit, which expires next month, Greenwich Generation said it would have to close the plant.

But the company argues that the state Department of Environmental Conservation overstepped its authority when it rejected Greenwich's application to renew its air pollution permit in May. State regulators cited the Climate Leadership and Communities Protection Act of 2019. They said the plant's operations run counter to the climate law, which aims to drastically reduce greenhouse gas emissions from gas-fired power plants and other sources.

But now Greenwich lawyers are arguing that the CLCPA doesn't give state regulators blanket permission to shut down businesses.

The lawsuit argues that despite a 2019 law, the DEC does not have “unlimited agency discretion to deny any permit, including applications for renewal permits for existing, long-used generating facilities.”

“Nowhere in the statute or legislative record does the Legislature intend to give unlimited veto power to all state agencies over any decision determining what economic activity should be permitted or prohibited in the state because of climate concerns,” wrote Yvonne Hennessy, an attorney with the law firm Berkeley Damon, which is representing Greenidge.

The lawsuit was filed Thursday in state Supreme Court in Yates County.

The move caught the attention of Greenwich opponents, environmentalists and climate activists across the state.

If Greenidge prevails in court, it could mean clear limitations on the ability of state agencies, particularly the DEC, to enforce carbon reduction obligations set out in the 2019 law through the denial of air emissions permits.

In New York state, numerous businesses, from power plants to landfills to incinerators, require air emissions permits to operate. Additionally, dozens of businesses across the state are technically operating on expired permits and are in the process of renewing or applying for renewal.

“They are trying to gut New York state's nation-leading climate change law,” said Yvonne Taylor, vice president of Seneca Lake Guardians, Greenidge's main opposition group.

Greenwich Power Station originally opened as a coal-fired power station in 1937. It was sold and mothballed in 2017, but has since reopened as a gas-fired power station operated by Greenwich Generation, a subsidiary of Atlas Holding Company.

By 2020, the plant was using some of the electricity it generated for its cryptocurrency mining venture.

Cryptocurrency mining is the act of discovering new tokens for cryptocurrencies such as Bitcoin. This “virtual currency” can be traded and used as a form of non-cash payment via a digital ledger of transactions made on an advanced web-based blockchain or currency, rather than traditional dollars.

While bitcoin and digital currencies have provided investors with a rollercoaster of speculation, the so-called mining industry has grown steadily over the past few years, raising concerns from environmentalists and climate activists.

Their concerns center on the vast amounts of electricity used in cryptocurrency mining to power the banks of dedicated computers that run the digital mines.

The idea of ​​gas-fired power plants being run even in part to mine cryptocurrencies, which are the subject of huge speculation, is anathema to climate activists who want carbon-emitting gas plants shut down.

Greenidge noted that gas is cleaner than traditional coal fuels, and the plant also produces electricity for the grid.

Either way, many will be watching this case as a possible indicator of how the landmark 2019 CLCPA law can be used to regulate a wide range of industries.

Earlier this year, Danskamer Energy withdrew its application to expand a gas-fired power plant near Newburgh after the DEC denied the company an air emissions permit under the Climate Change Act. The company challenged the decision in court but lost.

Also in Cohoes, the now-defunct Norlite incinerator/aggregate plant is applying for an air emissions permit revision, after the company said it shut down operations last spring for a “reevaluation of its scope of operations.”