After a federal judge approved a Texas Bitcoin miner’s legal bid to delay the Department of Energy’s emergency survey of its energy usage, the plaintiffs now want to see the matter scrapped altogether—and are accusing the agency of bowing to political influence.
Filed by the publicly traded miner Riot Platforms and the Texas Blockchain Council, the complaint names the DOE, its statistical arm, the Energy Information Administration, and the Office of Management and Budget. The temporary suspension granted by Judge Alan Albright on Friday came just hours before a proposed deadline for the firm to submit details on its power consumption.
“I was shocked to see how blatantly the law was ignored here,” Kara Rollins, who’s representing the plaintiffs, told Fortune. “We think that there’s a political expediency issue… We don’t want politics infecting data.”
The plaintiffs argue that submitting power-usage data, under the threat of criminal prosecution or possible civil penalties, on the expedited timeline requested by agency would be too costly and require the disclosure of confidential information. “This is a case about sloppy government process, contrived and self-inflicted urgency, and invasive government data collection,” the complaint states.
All parties are returning to the U.S. District Court for the Western District of Texas on Wednesday to argue whether the 14-day preliminary injunction granted last week should be extended. The complaint’s eventual goal is to annul the emergency survey altogether on the grounds it violated the Paperwork Reduction Act and the Administrative Procedure Act. Rollins added that Riot then would welcome a proper survey via the standard collection process, which would involve public notice and comment, and possibly take upwards of a year.
If the case proceeds, Riot intends to seek discovery on why the survey was deemed so urgent, which they argue is at odds with Energy Secretary Jennifer Granholm hinting last April that the reporting would follow standard procedures.
“We remain confident that our legal arguments will prevail and that reasonable people will notice the political machinations behind these information demands,” said Lee Bratcher, president and founder of the Texas Blockchain Council, the second plaintiff in the case.
‘The public has the right to know’
Following last week’s injunction, the EIA agreed to voluntarily suspend its emergency survey of energy use by 82 bitcoin mining companies until March 22, and sequester the data it has thus far collected from miners since Feb. 5. The EIA declined to comment for this story.
Michael Gerrard, a professor of energy regulation at Columbia University, told Fortune that the agency’s urgency is less surprising in light of the industry’s growth.
“There’s a lot of these Bitcoin mining operations that are being built around the country, and once they’re built, they’ll want to keep operating,” he said. “So if the government is thinking about exerting some controls, it needs to do that quickly, before too many more are built.”
Thomas Cmar, a senior attorney specializing in energy at the nonprofit Earthjustice, accused Riot et al of using arguments about “timing and process” to distract from energy usage. “The EIA clearly has authority to collect this type of information from crypto miners, as it does from many other industries. The reporting burdens here are minimal, and this is information that the public has the right to know,” he told Fortune.
Under federal law, the EIA can require any company engaged in “major energy consumption” to provide information on its power use. The agency sought emergency approval to survey crypto mining facilities last month. In a letter sent to the White House Office of Management and Budget, the agency expressed concerns that the climbing price of Bitcoin—breaking $54,000 on Monday—is ushering in a mining boom that could exhaust local power grids already under pressure from increasingly frequent extreme weather events.
The emergency survey also follows pressure from Congress to audit the industry’s usage. In July 2022 and in February 2023, Sen. Elizabeth Warren and Rep. Rashida Tlaib, both Democrats, sent letters to the DOE and the Environmental Protection Agency calling for the agencies to “implement a mandatory disclosure regime as rapidly as possible.”
Bitcoin mining requires large amounts of electricity to power complex computers in data centers that carry out calculations with the hope of solving a cryptographic problem. When a computer solves the problem, transaction data is submitted to the blockchain in the form of a new block, and the miner is rewarded with a set number of newly created Bitcoins.
According to initial estimates published by the EIA last month, the industry could account for between 0.6% and 2.3% of total annual U.S. electricity use. For context, last year, Utah consumed approximately 0.8%, and Washington state, home to nearly 8 million people, consumed 2.3%.
In Texas, Bitcoin mining already has raised electricity costs for non-mining Texans by $1.8 billion per year, or 4.7%, according Wood Mackenzie. The plaintiffs claim that the data processing centers actually bolster the grid’s reliability because in the event of severe weather events, they can swiftly shut down operations to minimize demand, counteracting shortages.
