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Black Hills Energy strikes deal with a bitcoin mining company to not interrupt its regular service

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Black Hills Corporation
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Black Hills Energy (BHE) signed an agreement to supply power to a bitcoin mining company that’s building a facility west of Cheyenne. It’s part of the Wyoming Interruptible Service Tariff that aims to build the state’s growing blockchain industry.

“In the summer of 2018, some of our business development folks started realizing that we had several Bitcoin miners coming to us asking for power,” said David Bush, State Government Affairs Manager for Black Hills Energy. “We were interested because of the size. It's generally a lot of power that they need.”

The tariff was approved by the Wyoming Public Service Commission in the summer of 2019. The company that Black Hills Energy has agreed to power is Bison Blockchain. But they were just one of many companies vying for BHE’s services.

“We did a reverse RFP [request for purchase] and asked for Bitcoin mining companies that had come to us and said, ‘Tell us what you need, what sort of power needs you have, and we'll see what works for us,'" he said. “And so all of those, I think there was about 15 companies that applied and that all added up to 1.2 gigawatts which is basically 1,200 megawatts. So that would have been, that would have been a huge increase, about six times the size of Cheyenne through that process. We identified this company [Bison Blockchain] as the one that we thought fit our profile and what we needed.”

Bitcoin mining operations take sizeable amounts of energy, which depend on the size and scale of operations.

“They will be our first customer under the Blockchain tariff and that’s up to about 45 megawatts to start and then it could go up possibly 75 megawatts depending on the company's growth,” Bush said. “As a non-traditional customer, we really wanted to make sure we didn’t have an impact and protected our existing customers and kind of residential customers and the mom and pop businesses and things like that. So, that’s the real purpose of the tariff.”

BHE intends to supply the necessary power needs in a way that doesn’t increase rates for their existing customers.

“We contract directly with the miner to buy the power they need, and it's just intended for them,” Bush explained. “It doesn't go into our other generation assets or anything like that. It's not included in what we charge our other customers.”

Hugh Cook is Wyoming Public Radio's Northeast Reporter, based in Gillette. A fourth-generation Northeast Wyoming native, Hugh joined Wyoming Public Media in October 2021 after studying and working abroad and in Washington, D.C. for the late Senator Mike Enzi.
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