During the Adel City Council meeting on Tuesday, Sept. 6, 2022, City Manager John Flythe advised that on Aug. 31, Blockstream company officials called and advised they did not want to be totally disconnected, but they were not going to run their units.
Their reason was the projected cost of the September bill was over 14 cents per kilowatt, Flythe said. “There are several locations in Georgia that have been cut off because of the rate.”
Flythe noted that the energy prices are dictated by the cost of natural gas. Natural gas in this country is expected to go to over 18 cents per unit, he explained. “It’s more than four times what it cost a year ago.”
Flythe said the Biden administration’s energy policy, selling natural gas offshore, is making the prices go up in the United States. “This is affecting more than just Blockstream in Adel,” he said.
Flythe added that when the price goes down, Blockstream officials are stating they will start the units back up.
Blockstream, a Bitcoin mining company, is based in Victoria, British Columbia. The Bitcoin mining units in Adel have created a considerable amount of utility revenues for the City of Adel by using many megawatts of electricity sold by Adel and partner cities. While some residents have complained about noise from the units, the loss of Blockstream is expected to have a major negative impact on utility revenues to the City of Adel and sales tax revenues to local governments.
During the Cook County Board of Education meeting on Monday, Sept. 12, 2022, Cook County Schools Finance Director Jackie Sparks discussed the impact that the shutdown in the Blockstream units will have on sales tax revenue (education Special Purpose Local Option Sales Tax) for the school system.
Blockstream officials told central office staff that the units were shut down Sept. 1 due to the price of energy, Mrs. Sparks said. However, Blockstream indicated that the units may be running again as of an April 2023 target time if energy costs continue to decrease, Mrs. Sparks said.
Still, the school system receives $30,000 to $40,000 a month in sales tax from the bitcoin process, Mrs. Sparks said. Thus, if the units are shut down for a minimum of eight months, the school system will lose $240,000 to $320,000 in sales tax revenue.
She noted that Blockstream plans to leave a couple of circuits on at the office and guard shack, but that won’t bring in much revenue.
The school system will still be “well off” in sales tax revenue from other sources, but “this [loss] is something we have to be aware of,” Mrs. Sparks said.
Last year, The Wall Street Journal published an article about noise concerns of residential neighbors of the Blockstream units on Highway 41 South in Adel.
The article is headlined, “Bitcoin Mining Noise Drives Neighbors Nuts—a Giant Dentist Drill That Won’t Stop.”
Prior to the Adel City Council meeting last week, Annette Tiveron, who was featured in the nationally published article, was pleased about the Blockstream units being shut down. She said the noise level at her house from the units, as measured by a sound meter, was at 65 decibels. However, when the units were turned off, “it is so quiet that you can hear a pin drop,” Mrs. Tiveron said.
Chris Cook, Blockstream’s head of mining, told the Wall Street Journal last year that the units’ noise is “barely audible” in an industrial zone that includes Sanderson Farms chicken feed mill and the Messer industrial gas plant. He told the WSJ, “Crickets are significantly louder.”