Bitcoin Miners Find Unlikely Allies in Rural Electric Utilities

Rural electric utilities across America are quietly partnering with bitcoin miners to provide flexible-load programs and revenue boosts. The arrangement benefits local residents, but zoning regulations in small towns are often unclear or overly restrictive.

In Hopkinsville, Kentucky, a bitcoin mine has operated inside a utility substation for three years without complaints. However, the city is now debating zoning regulations that could shut down the facility.

The head of strategy at Sphere 3D, Tom Masiero, explained that the mine participates in a flexible-load program that allows it to power down during extreme weather or high demand, freeing up electricity for residents. The local utility's general manager noted that the revenue helps avoid rate increases for 13,000 customers.

The company wants to expand with a second 50-megawatt facility and would pay $8-10 million to build a new substation, adding 15 megawatts of extra capacity for the community. However, proposed zoning regulations would ban any facility over 75 megawatts and require setbacks up to 1,000 feet from residential property.