Chelan Co PUD says security plans crucial as tensions mount with Bitcoin miners

VIDEO: Power grid threats

CHELAN COUNTY, Wash. — Conflict has been brewing over cryptocurrency mining in Central Washington, and it also has one Washington utility stepping up security. The Chelan PUD said a recent moratorium from mid-March on new bitcoin mining operations has angered some would be miners. There have been incidents and while it hasn’t lead to calls to the police, the PUD’s Customer service director and spokesperson did admit that tensions have run high.

They said part of the tension is coming from the fact that bitcoin miners want to set up their operations fast, they can do it nearly overnight. Andrew Windell, Chelan PUD’s customer service director, said it’s caused problems. “They want it (power & electricity) as fast as they can get it,” Windell said.

Large Scale Bitcoin mining, with shipping containers, giant cooling fans, and self-built substations are changing the landscape near Wenatchee.

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Windell said Chelan County’s moratorium on new operations, angering miners who’ve wanted to set up shop.

“There are applications on hold and people are frustrated with that,” he said.

The Chelan PUD said it was going to put ballistic paneling in its lobby, get more security cameras and start other security measures, there haven’t been fistfights with angry miners, and some of the changes were planned, but Windell said the measures are welcome.

“Some of the applicants have increased the sense of urgency of getting those security measures taken care of,” he said.

Central Washington is the gold rush region for bitcoin mining. Miners set up computer banks to do complex equations to obtain bitcoin online, spending an immense amount of power and time.

Hydroelectric power gives them cheap power and ideal location.

Lauren Miehe has been in the area since 2012 when the bitcoin mining rush began and said the last few months have shifted urgency for some miners trying to stake a claim in the area.

“Ever since the spike in Bitcoin price in mid-December you’ve had an inundation of bitcoin applications,” Miehe said.

Miehe is a former miner himself, who helps others set up, but is also working with a larger firm. He said the bitcoin industry could pave the way to other high-tech industries for the region which could also rely on inexpensive electricity. He stressed that confrontations between miners and utilities serve no one.

“If anything those are our partners and we want to have a good relationship with them,” he said.

Windell said another security issue for Chelan PUD; unauthorized bitcoin mining, maybe 100-to-200 illegal ops. He said some of them are in residential areas with unsanctioned wiring that pose fire hazards, could cause electrocutions or damage transformers.

“When a cryptocurrency miner does not understand that safety risk but understands that we’re going to disconnect power that can lead to a contentious situation,” Windell said.

Chelan County may lift its mining moratorium, allowing for new operations. The security concerns could subside as noisy anger is replaced by noisy new facilities. Windell said managing the revolution will take time and will have to happen on the utility’s timetable not the miners.

“We are in uncharted territory with this entire crypto currency development,” he said.

Chelan County’s meeting on the bitcoin mining operation moratorium is coming up Monday. It’s expected that they could hear testimony from both sides on ending or extending the moratorium.

Lauren Miehe believes the moratorium will not be lifted. The Chelan PUD has said that it is working to bring unauthorized mining operations into compliance, or shut them down if they prove to be a hazard.