Wyoming crypto efforts get boost with big power agreement in Cheyenne
Jun. 22—CHEYENNE — State and local efforts to attract more cryptocurrency and technology companies to the region, and to get them the electricity and other resources they need, have advanced.
Late Tuesday afternoon, the local power utility announced a long anticipated power contract to deliver the equivalent of about 1/5th of the energy that the entire city uses on average. Some new jobs and other economic development may come along with this.
Black Hills Energy said a crypto mining company recently entered into a five-year service agreement involving up to 45 megawatts, with an option to expand to as much as 75 MW. By year’s end, this facility (which presumably will use a large amount of computing power to virtually create new currency) “will represent one of the largest bitcoin mining operations in the region,” according to the utility.
This appears to be the biggest such power deal in the state, at least that has been made public. This is according to past reporting and to experts including the University of Wyoming’s Steven Lupien, who is the director of UW’s Center for Blockchain & Digital Innovation, as well as to an executive at the new mining company itself.
Partly in a bid to potentially stave off any deregulation of the overall power industry, this coming agreement has been cited by utility stakeholders as evidence that existing law and regulations work fine to get energy-intensive crypto mining operations the electricity they need at close to the prices they want.
The new blockchain interruptible service agreement is with MineOne, a spokesperson for Black Hills Energy, which is also known as Cheyenne Light, Fuel and Power Co., wrote in an email Tuesday night to the Wyoming Tribune Eagle. “MineOne, the general partner, is a New York based crypto mining company. There will be additional limited partners.” The spokesperson said the local operations will be developed and run by BCB Cheyenne, doing business as Bison Blockchain, a Wyoming-based company.
“As part of operating the mine BISON expects 20 new permanent jobs to be created in Cheyenne,” Black Hills Energy’s Laurie Farkas wrote to the WTE. WTE’s questions for the investor about the Cheyenne plans went unanswered. Crypto companies are typically reluctant to discuss their expansion and technology plans. However, a Bison executive answered all of the WTE’s questions.
“BISON has expressed a desire to provide learning sessions and facility tours to help educate various stakeholders and the public about the benefits of blockchain,” Farkas wrote. “They are interested in partnering with state universities to provide scholarships for students interested in blockchain technologies.” Blockchain is the underlying technology concept for virtual currency, in which a widely distributed electronic ledger of sorts keeps track of transactions.
The tech company’s initial operations will be at the North Range Business Park.
The local economic development organization, Cheyenne LEADS, is also involved. The head of this group told the WTE that there are no tax incentives or a discounted land price being offered.
The crypto tech company will likely start hiring in the first quarter of next year, Betsey Hale, CEO of Cheyenne LEADS, wrote in an email to the WTE Wednesday. “At full build out there will likely be 20 jobs. The hiring timeframe will also depend on industry growth.” Starting annual salaries could average $60,000, according to Hale.
The crypto mining will take place in modular units. Although plans are not final, there may be several employees on the site at all times, and they may work in an actual building, while bitcoin is mined in the modular units, Bison Blockchain’s Michael Murphy said by phone on Wednesday.
“Our goal is to be up and running at the full 45 megawatts” by Dec. 31, Murphy, one of three co-founders of Bison Blockchain, said about the power pact.
While MineOne is the owner-investor, Murphy’s business will operate the tech mine. “We are like the local presence. We are the ones that are active in the community” and doing the hiring, he said. “From the point where we break ground, it’s all really going to be boots on the ground.” Although Murphy lives in Denver, he anticipates spending a lot of time here.
“This first application of an innovative blockchain energy rate is a ‘win-win’ for our city, our state and the region,” said Cheyenne LEADS’ Hale said in the utility company’s announcement. “With our energy partner Black Hills Energy, we are strengthening and thoughtfully growing our local economy.”
Jonathan Make is the Wyoming Tribune Eagle’s assistant managing editor and editor of the Wyoming Business Report. He can be reached at email@example.com or 307-633-3129. Follow him on Twitter @makejdm.