CEDAR FALLS — Until recently, never before had Cedar Falls Utilities been approached by cryptocurrency companies wanting to lease its unused land for operations, said Mike Litterer, director of customer services and business development.
In less than 12 months, CFU has agreed to leases with two Cedar Falls-based companies, Simple Mining, LLC and Energy Conversion Group, LLC, for the temporary “placement of structures used for crypto-mining.”
“I think approving and adopting today could put the city on the hook for things that we are not ready to tackle just yet.”
These early-stage companies use lots of energy, and “would be the largest on the system if fully developed,” said Litterer.
But he said they “bring down the average cost of power” because of their “efficient operations” 24 hours per day, seven days per week.
That’s the biggest benefit to the CFU customers, said Litterer. Any revenue generated, he emphasized, will be invested back into the system and used to help pay overhead costs.
At the peak demand for energy or when high market costs arise, especially on hot days, the cryptocurrency operations are the first to see their energy reduced to limit the load on the system.
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The companies are defined in CFU documents as “large‐volume commercial customers with a minimum billed demand of 1,500 kilowatts at each property.” But they “must have the capability to reduce at least 90% of their load upon request by CFU.”
With the blessing of the public utility’s board of trustees, the three-year leases generate $1 per square foot per year.
No public objections to the proposed change were raised by any of seven elected members while meeting in committee Monday night.
Simple Mining president Adam Haynes agreed to a deal for 11,100 square feet near the Streeter Station Power Plant. Energy Conversion Group manager Ben Stroh accepted 22,050 square feet, next to the IP Substation on 605 W. Ridgeway.
Their contract rate agreements say Simple Mining and Energy Conversion Group pay monthly base serve charges of $125 and $500, respectively.
On top of that, both companies pay a demand charge of $8 per kilowatt and an energy charge of $0.005 per kilowatt hour.
The cryptocurrency companies cover the infrastructure costs needed to operate their businesses and hook up to CFU.