Environmental activists filed a lawsuit Friday against a New York state agency seeking approval for a cryptocurrency mining company to buy an upstate power plant. The group said the move violated the state's landmark climate law passed in 2019, and the lawsuit is the first to test how energy-intensive cryptocurrency mining can legally support the state's climate goals.
In September, New York’s Public Service Commission (PSC), which oversees and regulates public utilities, approved Canadian crypto mining company Digihost’s acquisition of the Fortistar power plant in North Tonawanda near Niagara Falls.
The Western New York Coalition for Clean Air and the Sierra Club, represented by the nonprofit Earthjustice, argued in a filing with Albany County Supreme Court that the PSC’s approval of the transfer violated the state’s sweeping climate laws, climate leadership and the 2019 Community Protection Act (CLCPA).
The bill sets ambitious goals for the state, including generating 70 percent of the state's electricity from renewable sources by 2030, zero-emission electricity by 2040, and an 85 percent reduction in statewide emissions by 2050. In their lawsuit, Clean Air and the Sierra Club said the Fortistar plant was used as a "peaking" plant, running 10 to 74 days a year, only during times of high demand for electricity, such as cold winters and hot summers. As a cryptocurrency mining plant, the facility would run 24/7 and generate up to 3,000 percent more greenhouse gas emissions, according to court documents.
The groups argue that the CLCPA broadly requires states to conduct environmental reviews when making approvals and decisions to ensure the state ultimately meets its climate goals. Court documents show that PSC "refuses to consider the CLCPA and its requirements" in the approval process, which begins in April 2021.
As greenhouse gas emissions rise, the groups argue that several communities around the Fortistar plant have been designated as possible "vulnerable communities" under the state's climate law, meaning people living in the area are suffering more. large environmental burden and have experienced historical investment cuts.
The law "requires all state agencies including [committees] to consider greenhouse gas emissions and impacts on vulnerable communities when considering administrative approvals and decisions," the court filing said. "If such action would threaten the CLCPA's mandate to reduce greenhouse gas emissions, it cannot proceed without reason." Responding to environmental concerns raised by Clear Air and Sierra Club to PSC during the approval process, Digihost said it would convert the facility to renewable natural gas, with the ultimate goal of using all hydrogen by the end of 2023, it said in public documents. The company also told the committee that its mining facility was approved by the North Tonawanda Planning Commission, which conducted its own environmental review.
Like Bitcoin, mining cryptocurrencies is energy-intensive. If bitcoin mining were its own country, it would rank 36th for annual electricity consumption, according to the Cambridge Bitcoin Electricity Consumption Index, which tracks electricity consumption used to mine bitcoins.
