EIA reaches agreement with bitcoin miners, will destroy collected data and publish new survey proposal

Update, March 1, 2024: The U.S. Energy Information Administration told a federal district court on Friday that it has “formally withdrawn and ceased” the emergency collection of data from crypto miners and agreed to “destroy any information that it has received or will received in response to the emergency collection.”

Instead, EIA will publish in the Federal Register a new notice of proposed data collection, with a 60-day public comment period, and it will also consider any comments submitted in response to the original proposal.

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Dive Brief:

• The Biden administration appears to have reached an agreement with bitcoin mining companies over the U.S. Energy Information Administration’s plan to collect energy usage and other data from the sector. A federal district judge on Thursday canceled a preliminary hearing on the matter and wrote that the parties “represented to the court that an agreement-in-principle was reached.”
• EIA had planned to begin collecting the data in February under an emergency authorization but was sued by the Texas Blockchain Council, or TBC, a nonprofit representing the industry, and mining company Riot Platforms, which said the expedited survey approval violated the Paperwork Reduction Act and some of the data requested was proprietary.
• Details of the agreement are under wraps but the U.S. District Court for the Western District of Texas, Waco Division, has ordered the parties to file details and a proposed order by Friday.

Dive Insight:

EIA this month estimated annual electricity use from cryptocurrency mining “probably represents from 0.6% to 2.3% of U.S. electricity consumption,” and said there are increasing concerns about the impacts on electricity costs, grid reliability and emissions that led to the development of a survey of mining operations.

“The increased demand associated with cryptocurrency mining can present challenges to the operation of electricity grids,” EIA said.

The crypto sector generally takes the opposite view, however, arguing that mining loads can actually help manage the grid and maintain reliability by going offline in times of high demand. 

Ultimately, the federal government has the authority to collect energy usage data, TBC founder and president Lee Bratcher told Utility Dive. But EIA’s planned survey of the sector included “several questions our attorneys believe exceed their authority,” he added.

Some of the data requested by EIA “comprises highly proprietary information including the number of mining units, the age of the units, their mining electric load, and the mining hash rate,” TBC and Riot said in their complaint. “That information, taken together with the facility’s electric consumption, could permit competitors in the U.S. and abroad to reverse engineer a company’s mining operation.”

“This is a case about sloppy government process, contrived and self-inflicted urgency, and invasive government data collection,” the parties wrote. EIA should have offered interested parties the chance to comment before moving ahead with the data collection, they said.

Sierra Club filed an amicus brief with the court this week, arguing that delaying the data collection “risks not just grid operators’ ability to ensure electric reliability to residences and businesses, but prevents grid operators and federal and state regulators from having the information necessary to prevent the abuse of current market rules by cryptocurrency mining companies.”

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“Bitcoin operations have already caused increased reliability risks and prices for the Texas grid,” Cyrus Reed, conservation director for the Sierra Club Lone Star Chapter, said in a statement. The Electric Reliability Council of Texas “has even warned that it has limited visibility into crypto operations’ forecasts and that operators don’t respond consistently to requests to go offline during high demand.”

But TBC’s Bratcher says the opposite is true. ERCOT pays miners to cut energy consumption during times of high demand — Riot received more than $31 million in August for modulating its consumption as heat and power demand spiked. Mining operations are known as “large flexible loads” in ERCOT, and in January they curtailed usage multiple times during Winter Storm Heather.

“These curtailments closely aligned with times of high systemwide prices or public appeals,” according to an ERCOT report on the response to Heather. However, “the magnitude of response was not consistent day to day,” the report said.