10 CapitalPress.com
April 20, 2018
Within eyesight of the Giga Pods is an apple-packing plant
POWER from Page 1
of having the baseline for the
benefit of many,” Bolz said.
“Our philosophy at the PUD
is to do the best for the most
for the longest, and it (crypto-
currency) certainly steps out-
side that definition.”
Packer’s concerns
Within eyesight of the
Giga Pods is an apple-packing
plant belonging to Columbia
Fruit Packers. The company
also has a controlled-atmo-
sphere fruit storage ware-
house farther east on Ward
Street and other facilities in
Wenatchee.
Mike Wade, general man-
ager of the company, said in
five years the company will
need to double its Ward Street
controlled-atmosphere stor-
age and build another packing
line near the airport.
“Right now there’s good
communication between the
industry and the PUDs. I think
they understand they need to
reserve some power growth
for the community in gener-
al. I’ve talked to Chelan and
Douglas (PUDs) about my fu-
ture needs,” Wade said.
Owners of other area fruit
packing-shipping-marketing
companies have also voiced
concerns.
Crypto costs
The PUDs have to be
non-discriminatory and serve
all local requests.
If crypto mining requires
more power than what’s avail-
able and forces the PUDs to
buy more expensive power on
the open market, it will drive
up low local rates that are a
key component of the region’s
agriculture-based economy
and hurt it, Bolz said.
Crypto mining will also re-
quire costly improvements to
electrical power distribution
systems, and if it goes bust
could leave the region’s rate-
payers with massive debt, he
said.
For example, a crypto re-
quest for 100 megawatts in
the town of Entiat would re-
quire three new substations
at about $2 million apiece, he
said, and new transformers
and transmission line are in
such short supply that it takes
two years to get them.
Some large crypto miners
also say they will stop mining
when bitcoin prices fall below
$8,000 apiece, creating pow-
er load imbalances at the ex-
pense of all users, Bolz said.
“People should be alarmed
because rate increases could
be quick and steep,” Bolz
said. “I’m not trying to say
the British are coming, the
British are coming, but they
are if this process and demand
is not managed.”
The PUD can require new
high-load users to pay infra-
structure costs. That and a big
fall in crypto prices might re-
duce power applications and
resolve the situation, he said.
Miners are mostly “outside
investors without much sense
of return to the valley. The
whole thing is like a cat chas-
ing its tail. We get accused of
being provincial and yes we
are,” Bolz said. “We’re pretty
comfortable with that.”
Dan Wheat/Capital Press
Like its own village, 24 Giga Pods are under construction in an industrial park near East Wenatchee’s Pangborn Memorial Airport. Each
will house hundreds of high-speed computer servers that collectively could produce about 80 bitcoins per month.
About
cryptocurrency
Cryptocurrency — also
called digital currency, alter-
native currency and virtual
currency — is a digital asset
used as a medium of exchange
that uses cryptography to se-
cure transactions and control
the creation of additional
units. Decentralized control of
cryptocurrency works through
a so-called blockchain, which
is a public transaction data-
base that functions as a ledger.
Bitcoin, created in 2009,
was the first decentralized
cryptocurrency. Others now
exist, and altcoin is a generic
name for them.
Miners earn value by using
specialized software to solve
algorithmic puzzles to unlock
more currency. Values have
been volatile, swinging from
a slump to a few hundred
dollars for a single bitcoin in
2015 to a high of $19,783 on
Dec. 17. As of April 6, the val-
ue was $6,599. The volatility
contributes to the accelera-
tion and slowing of the crypto
craze.
Because it’s unregulat-
ed, bitcoin early on was the
currency of drug dealers and
data-breach
blackmailers.
It’s also a way to launder
money. It has become more
legitimate, but skepticism re-
mains. Paul Krugman, a No-
bel Prize-winning economist
and New York Times colum-
nist, in January likened it to a
Ponzi scheme.
Giga Pods
The Giga Pods hum in the
Port of Douglas County in-
dustrial park on the western
edge of Pangborn Memorial
Airport in East Wenatchee. A
few hundred yards from the
pods sits a huge white-and-
blue building still prominent-
ly labeled “Executive Flight.”
It’s the hangar and offices of
an air ambulance and charter
service that went out of busi-
ness a decade ago. Now it’s
home to Giga Watt Inc., the
company building the Giga
Pods and owned by former
Microsoft software develop-
er David Carlson, a 2012 pi-
oneer in the region’s crypto
craze.
Carlson doesn’t mine us-
ing the Giga Pods directly.
His company leases its “pod
space” to other miners. He
apparently has his mine in
the former Executive Flight
building.
The pods are 12-by-48-
foot structures. Each houses
hundreds of high-speed com-
puter servers that collectively
could produce about 80 bit-
coins or other forms of cryp-
tocurrency per month, accord-
ing to a recent Politico article.
Together, they’ll use slightly
more than one megawatt of
electricity — enough to pow-
er about 500 homes.
Carlson did not respond to
emailed questions and a re-
quest for an interview.
Bitcoin mining is not
without its legal difficulties.
Giga Watt was sued March
19 in U.S. District Court by
a California investor alleg-
ing mishandling of more than
$500,000 of his investment.
A similar December lawsuit
against Giga Watt by a New
Orleans investor was settled
out of court in January.
Big demand
Grant County PUD gen-
erates the most power of the
three counties and has the
highest local power use —
and the highest cryptocurren-
cy power use. The cities of
Moses Lake, Ephrata, Quin-
cy and Mattawa are all in its
service area.
“There is much concern
here in Grant County and
also throughout the power
industry on the unprecedent-
ed requests for large power
loads from cryptocurrency
mining,” said Charles Allen,
Grant County PUD spokes-
man.
As of early April, the PUD
had 100 inquiries or requests
for 1,600 megawatts of pow-
er from crypto miners and
data centers. About 80 per-
cent of that, or 1,100 to 1,300
megawatts, is from crypto
miners, Allen said.
The total demand of
1,600 megawatts is more
than the combined 1,036- to
1,450-megawatt production
of the PUD’s two dams, at
Wanapum and Priest Rapids.
Currently, 10 crypto min-
ers in the county use 16.4
megawatts. Total local ser-
vice now averages 590 mega-
watts.
‘The science supports us increasing the harvest’
ELK from Page 1
that a year from now these
same folks would come back
and say, ‘Nice job. You’ve
done something,’” Commis-
sioner Don McIsaac said.
Amy Windrope, acting
deputy director, said there
have never been so many elk
in the valley and that the de-
partment has received more
than 100 complaints this year.
“We are under a micro-
scope, as well as a lot of pres-
sure to resolve this issue in a
way that works both for the
agricultural community, as
well as our co-managers, and
I can’t claim we’ve reached
that sweet spot just yet,” she
said.
Windrope said seven of
the tribes, led by the Still-
aguamish tribe, asked the de-
partment to not approve more
hunting. “The science sup-
ports us increasing the harvest
this year,” she said. “I think
it’s an important step to make
incremental progress toward
dealing with the damage is-
sues.”
Efforts to reach the Sil-
laguamish tribe for comment
were unsuccessful.
Skagit County Farm Bu-
reau President Bill Schmidt
told Fish and Wildlife com-
missioners that the elk have
found life better in the valley
than the hills — more grass
and fewer predators. “The
harvest is not keeping up with
the population explosion,” he
said.
Skagit County Commis-
sioner Ron Wesson, a dairy
farmer, said elk broke down a
fence and let loose about 100
of the dairy’s cows. The cattle
got on a highway and caused
collisions.
“We were responsible for
insurance claims on that, so
we spent about $12,000 on
vehicle damage,” he said.
“The damage is just getting to
such a point that it just can’t
go on.”
Fish and Wildlife Com-
missioner Jay Kehne said the
testimony was “excellent,
compelling.”
“The simple fact is, it’s
private land. You’re at risk
because of a state resource,
wildlife. It’s your livelihood.
It’s your reputation. Every-
thing is tied up in this,” he
said.
Commissioner Jay Holz-
miller, who raises livestock
in southeast Washington,
said that elk graze on his oats
and crash through his fences,
too. He said he didn’t blame
Skagit County farmers for be-
ing frustrated.
“If you had the local drug,
meth-heads breaking into
your house doing damage,
stealing everyday and you
called the cops and nothing
got done, I think you would
be a little upset,” Holzmiller
said. “They’re not asking for
a lot. They’re hard-working
people, trying to make a liv-
ing.”
Grant County has more
people, but the greater fac-
tors are the Yahoo and Mic-
rosoft server farms and other
data centers, manufacturing,
food processing, a lot of cen-
ter-pivot irrigation and some
tree fruit packing.
Not all agricultural pow-
er use is tracked separately
from non-agricultural use,
but food processing and irri-
gation alone use 118 mega-
watts, Allen said.
Grant County PUD has
not imposed an official mor-
atorium, but last November
it began shelving all requests
for new local service. It is
studying power loads, rates
and infrastructure and will
draft policies this fall aimed
at high power users paying
to improve infrastructure to
handle loads.
Grant has to serve lo-
cal customers first. It ended
a long-term contract with
Cowlitz County to serve the
Yahoo and Microsoft server
farms. Cowlitz had to buy
more expensive power else-
where.
Chelan situation
Chelan County PUD —
serving Wenatchee, Chelan
and Leavenworth — took ac-
tion similar to Grant County,
imposing a moratorium on
crypto mining power applica-
tions on March 19 while it de-
velops new rates and policies.
Steve Wright, Chelan
County PUD general manag-
er, said the applications ham-
pered other work and threat-
ened grid capacity to meet
planned growth of about 4
megawatts per year.
Commission
President
Bolz said the moratorium and
a $2,000 conservation fee
for large power applicants to
meet with PUD officials has
“trimmed the herd” of appli-
cants.
On April 16, PUD com-
missioners unanimously ad-
opted fees of up to $6,150 for
unauthorized electrical use in
residential areas and $11,400
in commercial or light indus-
trial areas after staff report-
ed discovering an average
of two to three small rogue
crypto miners per day.
One was at a remote home
in a woods off Highway 2
where “a bundle of extension
cords” was discovered lead-
ing to an outbuilding. Such a
setup would pose a high fire
risk during the warm weather
ahead, said John Stoll, PUD
customer utilities managing
director.
The PUD is cutting the
power and reporting the pow-
er theft.
Bolz said the PUD cut
power to an apartment in
Wenatchee when PUD em-
ployees discovered no one
lived there, the doors and
windows were left open for
cooling and computers min-
ing cryptocurrency were
remotely controlled from
California. The unit was us-
ing 11,000 kilowatt-hours of
power a month, 22 times the
normal load.
“There’s no way wiring
can handle that 24 hours a
day, day after day after day,”
Bolz said. “At some point
something has to give. It can
be heat resulting in fire.”
A transformer overloaded
by a crypto miner caused a
brush fire last year in the En-
tiat area, he said.
Chelan County PUD’s
annual production from the
Rocky Reach and Rock Is-
land dams averages 1,100 to
1,500 megawatts. Local load
averages 200 megawatts. Of
that, fruit storage and pack-
ing requires about 17 mega-
watts.
Twenty-two crypto min-
ers use 9 megawatts of an
approved 13.5 megawatts,
PUD officials said. There
were 19 crypto applications
for 16.3 megawatts before
the moratorium was imposed
on March 19. Looking three
years out, the PUD estimates
220 megawatts of crypto de-
mand.
Douglas PUD
Douglas County PUD —
serving East Wenatchee and
Waterville — generates an
average of 484 megawatts
from Wells Dam and uses
108 megawatts locally. Of
that, irrigators use about 40
megawatts. Crypto miners,
mostly near Pangborn Me-
morial Airport, use 15 mega-
watts. There were 28 appli-
cations for 205 megawatts
of power for crypto mines in
2017. PUD commissioners
have approved eight of those
for 90 megawatts.
In 2014, shortly after the
crypto power demand started
to climb, the PUD imposed
a three-month moratorium
while it adjusted rates and
policies. It split rates into two
tiers, a lower rate for residen-
tial customers and a higher
rate for large users. It also
requires new large users to
pay for system upgrades and
impacts on substations.
Capacity is being reserved
on substations for residential
growth and planning occurs
so that normal growth is not
threatened by large power
users, said Meaghan Vibbert,
PUD spokeswoman.
The PUD recognizes “the
vital role” of agriculture in
the county and considers that
as it develops new policies,
said Ron Skagen, PUD com-
mission president.
“The ag community
should be confident that
Douglas PUD has the ability
to serve its needs,” he said.
The Dalles
Crypto mining in The
Dalles, Ore., now draws a
couple megawatts but there
are proposals for more, some
in the 30- to 50-megawatt
range, said Kurt Conger,
assistant general manager
of Northern Wasco County
PUD.
The PUD doesn’t have
that available. It generates
only 15 megawatts and buys
power to provide 110 mega-
watts for the peak local load
and sells about 5 megawatts
elsewhere, Conger said.
Any request for more than
1 megawatt requires the ap-
plicant to pay for planning
and upgrades, he said.
The PUD’s substations are
maxed at peak loads with a
typical substation handling
10 to 20 megawatts, he said.
It can take 12 to 18 months to
design and build a new one,
all at the customer’s cost if
all capacity is dedicated to
them, he said.
A 50-megawatt load could
cost $1.5 million to $2 mil-
lion per month for power and
infrastructure with some cap-
ital beyond that, he said.
Such a customer would
be in its own class so the 5.5
cent per kilowatt-hour regu-
lar residential rate would not
be affected, he said.
“Our job is to treat all cus-
tomers fairly and offer service
we provide without cutting
any special deals,” Conger
said. “We look at credit wor-
thiness, require service depos-
its and payment assurance in
the near and long term.”
Jeff Davis, general manag-
er of Wasco Electric Co-op in
The Dalles, said there are no
crypto miners in the co-op’s
5,000-square-mile area of
Wasco and Sherman counties.
David Ortega, director
of packing at Orchard View
Farms, Oregon’s largest cher-
ry grower in The Dalles, said
the company’s power demand
is seasonal, peaking during
the three months of cherry
packing.
“I don’t think we’re that
concerned with it yet for the
power they use affecting us,”
Ortega said, “but others are
concerned.”
ODFW recently reported there were at
least 124 wolves statewide at the end of
2017, an 11 percent increase over 2016
WOLVES from Page 1
it could actually increase the
risk of predation at neigh-
boring farms up to three
miles away.
In this case, ODFW au-
thorized killing two wolves
from the Pine Creek pack
after back-to-back attacks on
private land leased by ranch-
er Chad DelCurto. Nine days
later, the pack began preying
on livestock again at Pine
Creek Ranch, about 5 to 6
miles away.
Environmental groups are
staunchly opposed to killing
any wolves in Oregon, argu-
ing the population is still too
small and fragile. ODFW re-
cently reported there were at
least 124 wolves statewide at
the end of 2017, an 11 per-
cent increase over 2016.
Conservationists
also
point to four cases of wolves
that were illegally killed in
2017. Out of 13 total wolf
deaths throughout the year,
12 were human-caused.
Under Phase III of the
Wolf Conservation and
Management Plan, ODFW
can authorize killing wolves
that make a habit of preying
on livestock in Eastern Or-
egon. The species remains
federally protected west of
highways 395, 78 and 95.
Local ranchers had been
using non-lethal deterrents,
according to ODFW, in-
cluding burying bone piles,
removing dead cows, pa-
trolling cattle from daylight
to darkness and moving
the animals off of pastures
where the latest wolf attacks
occurred.
“It’s really disrupting
(ranchers’) schedules, both
for turning cattle out and
getting spring work done,”
Rollins said.
Jerome Rosa, executive
director for the OCA, said
incremental take of wolves
will not solve the problems
ranchers face, and actually
leads to packs becoming
more aggressive.
“It’s a no-win situation,”
Rosa said.
The Pine Creek pack
now includes five known
wolves — after the three
that were shot — occupy-
ing territory mostly south
of the Imnaha River and
east of Halfway to the Ida-
ho state line. In 2017, the
pack produced at least five
pups that survived to the
end of the year.