Lansing debates cryptomining at Cayuga Power Plant

Lansing residents have known since 2019 that the old Cayuga Power Plant could be getting a digital facelift. Plans have been put in place to convert the plant, which opened in 1955, into a cryptocurrency data center that would use blockchain technology to mine cryptocurrencies like Bitcoin.

There has been some division in the community about using the power plant for cryptocurrency mining. While the plan states that the mining center would create a large tax base and many jobs, some in the community are wary of how much energy certain types of cryptocurrency mining can take.

Lansing Town Supervisor Ed LaVigne has taken a wait-and-see approach to this issue, which has many layers.

“We try to be methodical and unemotional about this because people are passionate,” he said. “I understand that, and they’re allowed to be, but I’m not. I have 11,000 people between the town and the village I’m responsible for. I’m not going to be irresponsible to them. I’m not saying passionate people are, but I’m saying we have to be prudent in how we do this.”

New York State Assemblyperson Anna Kelles also wants to put a pause on not just the Cayuga Power Plant but also other former plants in upstate New York that have been converted into data centers.

Massena, Plattsburgh and Somerset all either have data centers or are planning to. New York has just under 20% of the Bitcoin miners in the United States, which is second only to Texas.

Kelles has a bill in the Assembly that would put a three-year moratorium on data mining centers that use a currency-validating method called proof-of-work, which uses fossil fuels. Proof-of-work requires a high amount of electric power, with computers needing to process mathematical equations at peak speeds 24 hours a day.

Kelles said within two years of a moratorium going through, she would want the Department of Environmental Conservation to do a full study of the potential environmental impacts.

“Cayuga Lake has had the largest number of harmful algal bloom outbreaks of any lake in the Finger Lakes,” Kelles said. “They were using lake water for the Cayuga Power Plant, but we may be at a tipping point for the lake health that we can’t afford to add on another significant offense to that system.”

Kelles said she views cryptocurrency technology as revolutionary, but there has to be a way for the plants to use renewable energy. If not, she said the plant could use enough electricity to power 16,400 homes, more than the population of Lansing. She said it’s hard to see how the grid can handle that kind of pressure.

“If this facility becomes a cryptomining operation, the only way they would be off the grid and not using fossil fuels is if they had renewable energy infrastructure completely on site,” she said. “As long as they’re tied into the grid, then they’re contributing to the pressure on the grid and the increased demand on fossil fuels.”

She also cited the Climate Leadership and Community Protection Act, which was signed by former New York Gov. Andrew Cuomo and aims to have New York getting 85% of its energy from non-renewable resources by 2050. She said she thinks that would be a difficult goal to achieve if more towns bring in data centers that use fossil fuels.

The proposed moratorium passed the state Senate last year but failed to pass the Assembly. Kelles said she and others in the Assembly will try again in 2022, and she thinks there has been positive momentum.

“Since [the bill didn’t pass], there has been a tremendous amount of education for the public on this issue and a tremendous amount of concern expressed publicly by residents where there is cryptocurrency mining,” she said.

She said there was a public hearing in November 2021 with the chairs of the environmental conservation, science and technology and energy commissions where a lot of important information was shared.

“The Assembly has definitely done a lot of work to prepare itself to move forward with this bill,” she said. “We have to continue to push really hard because it is a priority bill for me.”

LaVigne said he wants to have an open and honest conversation about the future of the power plant, as he sees the positive economic impacts but wants more information. He said the data center opening in Somerset (in Niagara County) can shed some light on what those economic impacts could be.

“It’s nice to say it’s job creation, but how many jobs?” he said. “The good news is you’ll be able to figure out in a small period of time, hopefully, when this real data center in Somerset goes online, what the reality really is.”

There also could be a tax benefit to having a use for the power plant. LaVigne said 20 years ago, the plant was assessed to be a $233 million tax base, but in 2022, that has probably doubled.

While the issue of cryptocurrency is complicated to some, LaVigne said he’s noticed that there has been more education on what it is and how mining the more than 6,000 different cryptocurrencies works. He said he hopes that conversation can continue in Lansing.

“I think this whole conversation is like going for a physical exam for one ailment [and] you find out there’s a whole cascade of other things you should be worried about,” he said. “Let’s have an open, honest, factual conversation, and let’s evolve together to get something up there that would be mutually beneficial and won’t be so concerning to certain people.”

Lansing at Large appears every week in Tompkins Weekly. Send story ideas to editorial@vizellamedia.com.