A Tiny Texas Village Is About to Annex a Gigantic Bitcoin Mine

In Oak Valley, a sleepy village in rural Navarro County, Texas, there is very little of anything. A potholed road runs through its two square miles of sun-beaten grassland, past a modest prefab community center and a “poor excuse for a park,” as the local mayor describes it.

Only around 400 people live in Oak Valley. But despite its diminutive size and few resources, the Texas hamlet is preparing to fold into its borders, through unusual means, an industrial-scale bitcoin mine—a move that could increase its annual budget by as much as fortyfold.

Four miles away from Oak Valley on a 265-acre parcel of land, public crypto mining firm Riot Platforms is busily constructing what is set to become the world’s largest bitcoin mining facility, according to the company. Once complete, it will consume up to 1 gigawatt of energy, enough to power hundreds of thousands of homes.

The Riot facility currently sits on a patch of unincorporated land, in the jurisdiction of the Navarro County government. But the company is in the process of negotiating a deal, as shown by a series of email communications seen by WIRED, through which the plot will be annexed by Oak Valley.

The annexation plan, which has yet to be finalized, will make possible much-needed improvements to Oak Valley roads and other public infrastructure. Nor will it cost Riot anything, because the energy company serving the area will foot the bill. For Riot, it is a public relations gambit, meant to curry favor with local residents and county officials standing in the way of a lucrative discount on its property taxes. Millions of dollars potentially rides on its ability to garner local support in Navarro County before a final decision on its abatement application is reached.

Riot declined to comment on the prospect of an annexation by Oak Valley. Brian Morgenstern, head of public policy at Riot, says only that “an annexation should be good for all sides.” “We want to make sure we are being good neighbors and bringing positive impacts to the community,” he says.

To fund public works, a township like Oak Valley has to rely predominantly on money collected from the electricity provider in exchange for the use of local rights-of-way. These so-called franchise fees are calculated as a percentage of residents’ energy bills. In normal circumstances, Oak Valley collects approximately $9,000 in franchise fees per year, which makes up 75 percent of a meager total budget that is insufficient to cover simple infrastructure improvements.

“Oak Valley has no money,” says David Brewer, a commissioner in the Navarro County Commissioner’s Court, the governing body of the district. “Our county budget is extremely tight, so we can’t help some of the areas we want to.”

However, if Oak Valley succeeds in annexing the energy-hungry Riot facility, says Brewer, it will hoover up franchise fees “to the tune of a quarter- to half-a-million dollars a year” once the 1-gigawatt plant is complete.

Leading the push for the annexation is Max Taylor, the mayor of Oak Valley, who declined to be interviewed for this story. After a change of legislation in 2019, municipalities in Texas can no longer annex a parcel of land by force, so they must seek permission from the landowner. But Taylor appears to have had little trouble convincing Riot: “This project has my full support,” wrote David Schatz, senior vice president of operations at Riot, in an email to Taylor on June 25.