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Proposed crypto-mining facility in Hall County draws protests

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New York-based VCV Digital wants to install a “data center” in southwest Hall County.

As reported by The Independent in July, a conditional use permit amendment was approved by the commissioners to allow for such a facility in an agricultural zone.

The conditional use permit request from property owner Michael Seda was brought to the board and a public hearing held on Tuesday.

No action was taken by the board. It will be considered on Dec. 6.

VCV Business Development Partner John Skalla spoke to the board about the project.

The center would be used to host Bitcoin mining, he said.

“We would give them these containers and they would rack their devices, their mining rigs and we would run it for them,” said Skalla.

Crypto-mining is a digital process where, each time a transaction is validated, it is added to a ledger or “blockchain” and earns a digital “coin.” The computers in the data center would engage in such transactions continuously.

The modified shipping containers will hold racks of computers inside connected to broadband and a transformer, said Skalla.

“The reason for selecting this particular site is that there’s a substation currently there with capacity,” he said. “Being close to that substation is important to us.”

The site would also be lighted and fenced, and have onsite security guards.

The total power capacity, said Skalla, would be 14 megawatts.

An additional substation would have to be built for the additional load, said Aaron Brown, Southern Public Power District engineering operation manager.

“That site has a 12.5 megawatt transformer. Today it’s using about 300/kw, which is about .3 megawatts,” said Brown.

This would not affect rates or frequencies for customers.

“This customer will be on an interruptible rate themselves, so that they can be interrupted based on certain criteria,” said Brown. “If you remember the February 2021 coldsnap we had, these guys would have been interrupted on that.”

Skalla said VCV hopes to have the project completed in May 2023.

Douglas Rainforth of Doniphan criticized how VCV seems uncertain about how the site will be designed, and said their original plans from July were changed at an informational meeting on the project held last week.

Originally proposed as having heavy HVAC systems for cooling, it was later described as being an open-air facility without HVAC with well-drawn water for cooling, for example.

Noise mitigation options have been suggested from planting tall trees to using bales of hay.

“Is there noise associated with farming? Absolutely. But not 24 hours a day, 365 days a year,” he said. “Agricultural noise is seasonal and when you live in an area with farming operations, the noise associated with those operations is expected and accepted.”

Rainforth also questioned the location of the site.

“This operation is not a farm or agriculture related business. It’s an industrial type of business and in Hall County, like all counties we have zoning laws,” he said. “What’s the point of planning if we’re going to put an industrial business in an ag zone?”

Rainforth also described the ultimate product as “nefarious.”

Justin Gregg of Adams County, who lives only 600 feet from the proposed site, said there are four houses that will be impacted by the lights and noise from the facility.

“This isn’t a farm facility going in,” he said. “We grew up around a cornfield. It’s all cornfields around us. It should stay that way. Why are we taking an industrial facility and putting it in the middle of a cornfield?”

His father, Tony Gregg, who also lives in the area, noted that the site is an area that received floodwaters, which gets up to three feet deep, and expressed concerns about security.

“I’ve got grandkids that live there. If something goes wrong and they’re worried about theft, where are they going to go? Are they going to go near my son’s house and where my grandkids live?” he asked. “Because it’s going to be 20 to 30 minutes before anybody can show up from the Sheriff’s or the State Patrol.”

Gayle Reiners of Doniphan voiced opposition to the permit request, saying local homeowners are concerns about their property values.

“Will a data center draw criminal activity to our area due to security issues?” he asked. “Will the noise and lights have an impact on the wildlife in the area? Our area has a high deer population during the spring and summer months.”

Reiners also noted the site is in the floodplain of the Flag Creek watershed and the roads in all directions are subject to flooding that lasts several days.

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