In a bid to block a regulatory order to close its Finger Lakes power plant used for bitcoin mining, Greenidge Generation LLC has filed suit against the state Department of Environmental Conservation.
The DEC gave the company an early September deadline to shut down the Greenidge Generating Station in the town of Torrey, Yates County, on the western shore of Seneca Lake.
The lawsuit, filed Aug. 15, is the latest development in a multiyear fight between Greenidge and state environmental regulators.
The Torrey facility, which was built in the 1930s, ceased operating as a coal-fired plant roughly a decade ago. Since 2014, it has been operated by Greenidge, which began using the plant for bitcoin mining in 2019.
The facility is subject to several DEC permits. The current dispute dates to June 2022, when Greenidge’s application for renewal of its air permit—which expired in September 2021—was denied by the DEC.
The company appealed the denial, but in early May, DEC Regional Director Dereth Glance issued a final decision, ending the appeal process. Glance wrote that “it is beyond dispute that granting the renewal permit … is inconsistent with or will interfere with the attainment of the statewide greenhouse gas limits.” The company said the decision was based on “numerous errors of law and fact.”
A June 4 letter from the DEC to Greenidge ordered the company to close the plant by Sept. 9.
Greenidge’s proof-of-work cryptocurrency mining operation has drawn fire from a number of environmental and citizen groups, who say it poses a range of hazards to the environment as well as harm to the Finger Lakes region’s multibillion-dollar agritourism economy. The impact on greenhouse gas emissions is high on their list of concerns.
In its 2022 ruling, the DEC declared that the “natural gas-fired facility’s continued operations would be inconsistent with the statewide greenhouse gas emission limits” established in the 2019 Climate Leadership and Community Protection Act.
The Climate Act requires New York to reduce the release of greenhouse gas 40 percent by 2030 and no less than 85 percent by 2050, based on 1990 levels.
“Among the factors considered was the dramatic increase in greenhouse gas emissions from the facility since the passage of the Climate Act, driven by the change in the primary purpose of its operations,” the DEC continued. “Rather than solely providing energy to the state’s electricity grid, the power plant now primarily provides energy … to support the demands of Greenidge’s energy-intensive proof of work cryptocurrency mining operations.”
A Greenidge statement issued in response was sharply critical the DEC decision, calling it “arbitrary and capricious.”
In its suit against the DEC and Acting Commissioner Sean Mahar, Greenidge contends the department has misinterpreted the Climate Act as “authorizing unlimited agency discretion to deny any permit, including a renewal permit application for a long-standing, existing electric generating facility.”
It also argues the DEC “grossly exceeded its own jurisdiction, usurped the role of the legislature and the delegated authority of the New York State Public Service Commission (‘NYSPSC’) over electric generating facilities, and disregarded the New York Independent System Operator (‘NYISO’) process.”
Further, the suit notes that three months before the DEC’s June 2022 renewal permit denial, Greenidge offered to take what it described as “unprecedented actions to further reduce our emissions” and make those actions binding conditions in its renewed permit. Specifically, the company proposed reducing the Torrey facility’s permitted greenhouse gas emissions by an additional 40 percent by 2025, five years before the first Climate Act emissions reduction target date in 2030, and achieving zero-carbon emissions by 2035, five years before New York’s target for electricity-generating plants.
The suit asks the court to take a number of actions. Among them:
■ annul the DEC’s June 2022 denial of Greenidge’s application to renew its Title V air permit and the May 8, 2024, final decision;
■ issue a declaratory judgment that the department misinterpreted and misapplied provisions of the Climate Act;
■ issue a declaratory judgment that the DEC lacks authority to deny a renewal permit for an existing facility when the applicant seeks no change in permitted emissions prior to 2030 and the renewed permit will expire prior to 2030, the deadline for the first statewide emissions target;
■ issue a declaratory judgment that the Climate Act does not vest the department (and all other state agencies) with “authority to usurp the statutorily-defined role” of the PSC or the NYISO in determining whether an electric generating facility is needed; and
■ enjoin the DEC from taking any action to deny Greenidge’s permit renewal or require that the Torrey plant cease operations.
Four groups opposing renewal of Greenidge’s air permit—Seneca Lake Guardian, the Committee to Preserve the Finger Lakes, Fossil Free Tompkins and the Sierra Club—have asked the court to grant them intervenor status. Each has “an interest in protecting the Finger Lakes region from Greenidge’s harmful pollution,” states their filing, which says the community surrounding the Torrey facility is being exposed to increased levels of “carcinogens, carbon monoxide, nitrogen oxides and particulate matter.” All four groups were granted full party status in the DEC proceeding.
A hearing in the case before state Supreme Court Judge Jason Cook has been scheduled for Sept. 3 in Yates County.
The stakes are high for money-losing parent company Greenidge Generation Holdings Inc., which also has cryptocurrency facilities in Mississippi, North Dakota and South Carolina. In the six months ended June 30, the firm posted a net loss of $9.5 million on revenues of $32.4 million. In the same period a year earlier, it lost $18.2 million on revenues of $29.9 million.
Greenidge stock, which trades on the Nasdaq Global Select Market under the ticker symbol GREE, closed on Friday at $2.18 a share—down more than three-quarters from its 52-week high of $9.26. In late 2021, its share price topped $1,500.
In its most recent quarterly filing with the Securities and Exchange Commission, Greenidge noted that court proceedings related to the DEC’s denial of its air permit renewal application “may take a number of years to fully resolve, and there can be no assurance that our efforts will be successful.”
The company added that failure to secure a temporary restraining order or preliminary injunction to allow the Finger Lakes facility to continue, not to mention secure renewal of its air permit, “could have a material adverse effect on us and our ability to continue operating as a going concern.”
