Cryptocurrency Mining Facility/Natural Gas-Fired Electric Generating Plant: New York Administrative Law Judge Upholds Denial of Clean Air Act Title V Permit Renewal | Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.
Title: New York Denies Clean Air Act Permit Renewal for Greenidge Generation’s Cryptocurrency Mining Operation
Introduction:
A New York Administrative Law Judge (ALJ) recently issued a decision upholding the State of New York Department of Conservation’s (NYDEC) denial of a Clean Air Act Title V permit renewal for Greenidge Generation, LLC (GGL). The denial was based on the company’s operation of a cryptocurrency mining facility that was found to be in violation of New York’s climate change regulations.
Background:
Greenidge Generation, LLC applied for a renewal of their Title V air permit, which would allow them to continue operating their natural gas-fired electric generating facility located in the Town of Torrey, New York. The Facility primarily provided energy to a cryptocurrency mining operation behind-the-meter.
The NYDEC determined that the Facility was primarily operating to meet the energy demands of its own cryptocurrency mining operation, resulting in increased greenhouse gas emissions since the passage of New York’s Climate Leadership and Community Protection Act (CLCPA) in 2019.
The Decision:
Based on the requirements of the CLCPA, which mandates a reduction in greenhouse gas emissions by 60% of 1990 levels by 2030, the NYDEC denied GGL’s application for the Title V air permit renewal in 2022. The denial was based on the determination that the Facility would not comply with the CLCPA’s emissions limits.
The ALJ’s ruling upheld the NYDEC’s decision, stating that the Facility’s operations would interfere with the greenhouse gas emissions limits set by the CLCPA. The ALJ also found that GGL failed to provide sufficient evidence justifying the Facility’s operations under the CLCPA. Additionally, there was insufficient evidence to demonstrate effective mitigation measures.
The key focus of both the NYDEC and the ALJ’s decision was the change in the Facility’s purpose from a peaker power plant to a constantly operating cryptocurrency mining operation. This change was found to be inconsistent with the CLCPA’s goals.
Next Steps:
GGL has the opportunity to appeal the ALJ’s decision to the NYDEC Commissioner. However, until an appeal is filed and determined, GGL’s permit renewal remains denied.
Conclusion:
The recent decision by the ALJ upholding the denial of Greenidge Generation, LLC’s Clean Air Act Title V permit renewal highlights the increasing scrutiny facing cryptocurrency mining operations in the context of climate change regulations. As governments continue to prioritize reducing greenhouse gas emissions, it is expected that similar cases and debates will arise in other jurisdictions. The outcome of this case will likely influence how cryptocurrency mining operations navigate environmental regulations in the future.
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