Massive cryptocurrency mining operation planned at former Ponderay Newsprint mill

The new owners of the closed Ponderay Newsprint in Usk, Washington, have officially requested enough power to get the mill back on stream and build what may be one of the largest cryptocurrency mining operations in the country.

Allrise Capital Inc., based in Irvine, California, won an auction in April to purchase the mill for $ 18.1 million. The mill was one of Pend Oreille County’s largest employers when it closed last year after its previous owners filed for bankruptcy.

Todd Behrend, who maintained the facility with an emergency crew until it was sold, was hired as CEO of Ponderay Industries LLC. Behrend confirmed that the new owners hope to convert the mill to produce cardboard packaging and add computer stacks needed for mining cryptocurrencies.

“At the moment we are waiting for the (Bonneville Power Administration, BPA for short) to decide whether and how much electricity we can deliver here,” said Behrend. “That will determine all decisions.”

Colin Willenbrock, General Manager of Public Utility District No. 1 of Pend Oreille County said the mill asked to restore the average 85 megawatts of electricity per month to restart the mill, and another 220 megawatts per month for Blockchain LLC, which is the proposed data center for mining cryptocurrencies.

For the benchmark, Willenbrock said his small PUD averages 35 megawatts per month to power approximately 9,000 commercial and residential customers. The Ponderay request would mean that the factory’s location could receive about ten times as much electricity as all of the PUD’s other customers combined.

“That’s a pretty big load in the middle of a rural supply area,” said Willenbrock. “There’s a reason we need to study it and make sure our partners are comfortable.”

Even if the only request was to restart the mill, that proposal would require multiple agency review, he said.

“Customers have an aggressive schedule to ramp it up. Like most customers, they need it yesterday, ”says Willenbrock. “But with a significant load increase of this magnitude … we can’t just flip the switch and turn it on again.”

He said the mill had been shut down for more than a year and all of the infrastructure that was in place needed to be reviewed. Then new equipment would have to be installed to handle the electricity for cryptocurrency mining, he said.

Behrend had originally hoped to start by October 1, but that schedule has been postponed to November or early next year depending on approval.

“I understand Todd’s frustration,” said Willenbrock. “The public tends to fail to understand how the larger grid works, how new loads are turned on and off, and how all of this needs to be analyzed so that we can maintain adequate service.”

Replacing jobs

The mill was previously jointly owned by Lake Superior Forest Products, a subsidiary of Quebec-based Resolute Forest Products, and five major US publishers.

The 927 acre property consists of 29 buildings and storage facilities that have been built alongside the Pend Oreille Valley Railroad and the Pend Oreille River.

When it closed, the mill laid off 150 workers.

Behrend said he hoped the factory would reinstate most of these workers. He said the data mining center could eventually hire that many too, which would double the number of workers the plant employed when it closed.

“A lot has to be right,” said Behrend. “But it would be a very large operation and certainly another top employer in the county.”

Grant Forsyth, chief economist at Avista Corp., said the announced plans to reopen the mill and create a cryptocurrency mining operation would come a great deal of relief to Usk.

“Losing so many jobs at once for a county this size was a big deal,” Forsyth said.

He said there were still many unanswered questions about who the factory would put on hold and for what payment.

“Is the average wage higher, the same or lower? he said. “It’s hard to see at the beginning.”

Forsyth also said it will be interesting to see if the owners hire local community members to work in the data mining operation or bring them in from elsewhere.

power supply

Behrend said the company is having supply chain issues securing the computers needed to run a large cryptocurrency mining operation.

However, he confirmed plans to create one of the largest data centers in the country.

“We are in the process of building a very small company and examining the feasibility of a much larger one,” he said.

Whinstone Inc., based in Rockdale, Texas, is the largest cryptocurrency mining company, according to the Washington Post. The Whinstone site currently consumes an average of around 300 megawatts per month and is to be expanded to 750 megawatts by next year.

As for the planned data center in Usk, the Pend Oreille PUD does not have the capacity to deliver the new power demand, Willenbrock said.

The PUD receives an average of around 90 megawatts from the Box Canyon Dam. It receives an average of 48 megawatts from the Seattle City Light-Boundary Dam and is allocated 25 megawatts from the BPA, he said.

“We could deal with that in any case,” said Willenbrock about the Ponderay power request. “But we wouldn’t be able to get all this energy internally.

“The net difference has to be bought from a third party,” he continued. “That would come from a number of local sources.”

source https://www.bisayanews.com/2021/09/16/massive-cryptocurrency-mining-operation-planned-at-former-ponderay-newsprint-mill/