Looking to entice Bitcoin miners to the region, Black Hills Energy announced today that it has completed its first agreement to provide power to a crypto mining facility under Wyoming's Blockchain Interruptible Service Tariff.

The company says the unidentified facility will be one of the largest bitcoin mining operations in the region, and is expected to be operational and purchasing energy by the end of the year.


"We are excited to serve this new type of customer and to explore the benefits we can provide to other flexible load customers over the longer term," Black Hills Corp. CEO Linn Evans said in a statement.

The company says that attracting blockchain companies with high energy needs will provide Wyomingites with several financial benefits, including property and sales taxes, and long-term employment.

Black Hills Energy is a subsidiary of the Cheyenne Light, Fuel, and Power Company, which in turn is part of Rapid City, South Dakota-based Black Hills Corporation. The firm serves 1.2 million customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming.

The energy supplier first proposed the Blockchain Interruptible Service Tariff in October 2018 to the Wyoming Public Service Commission, saying the state's "existing tariffs are insufficient to attract blockchain business while continuing to provide safe, reliable and affordable service to existing retail customers."

The Tariff was approved in June 2019 to attract new industries that have high energy demands over limited durations, specifically blockchain companies.


“By providing a blockchain interruptible service option, we are able to meet the high energy demands of the blockchain industry without adding costs to our existing retail customers,” company vice president Shirley Welte said at the time.

According to the agreement, Black Hills Energy will deliver up to 45 megawatts of electric service with an option to expand service up to 75 megawatts to the new customer in Cheyenne, Wyoming, for five years.

Bitcoin mining has been a hotly debated topic in recent years due to the amount of electricity needed to support the network. High energy use limits the profitability of mining, and adversely impacts the environment. If the Bitcoin network were a nation, it would rank 34th in the world in annual electricity use, according to the Cambridge Bitcoin Electricity Consumption Index.

Environmental concerns about Bitcoin mining have caused states like New York to consider banning the practice. Organizations including Wikimedia Foundation and Mozilla stopped accepting Bitcoin donations this year, citing the environmental impact.

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