County in court Wednesday to try and prove rural Bitcoin mine not ‘permitted use’ | WJHL

JONESBOROUGH, Tenn. (WJHL) — Wednesday’s hearing of Washington County’s lawsuit against electric utility BrightRidge isn’t about noise — but its outcome will likely impact a directly related noise controversy in the county’s rural New Salem community.

What started as a dispute over noise emanating from a privately run Bitcoin mine adjacent to a BrightRidge substation is entering court as a technical issue involving zoning regulations.

The “mine” consists of powerful computer equipment that performs complex equations in hopes of unearthing new digital currency and verifying bitcoin transactions.

Fans used to cool that equipment cause the noise, and neighbors’ complaints about that noise led — over several months — to the current legal dispute not between the county and the mine’s owner and operator Red Dog Technologies, but its landlord and provider of its electricity, BrightRidge.

BrightRidge has continued to provide power to Red Dog since a Sept. 30 county order that it cease the “unpermitted use” of the land.

“BrightRidge refuses to admit responsibility for its property and refuses to admit responsibility for its use of the property which it operates through agreements and consent,” the lawsuit reads.

Chancellor John Rambo is set to hear arguments in the case at 9 a.m. in Chancery Court.

Washington County seeks a restraining order that would require BrightRidge to prevent what the county claims is unpermitted use of the property at 1444 Bailey Bridge Road.

The lawsuit brought by Planning Director Angie Charles and filed by County Attorney Allyson Wilkinson claims BrightRidge — as the landowner and “petitioner” for whom a February 2020 rezoning request was granted — is ultimately responsible for the unpermitted use on its property.

But after the Sept. 28 order from Charles, BrightRidge “referred Washington County to ‘the leaseholder and operator of the facility, Red Dog Technologies.’”

In a Sept. 30 letter to Wilkinson, BrightRidge CEO Jeff Dykes wrote that BrightRidge’s rezoning paperwork “clearly shows the principal usage contemplated was for a block chain data center, which was subsequently approved by both bodies (the planning commission and county commission.)”

Tim Hylton checks sound levels from a Bitcoin mine adjoining his rural Washington County, Tennessee property on September 24.

Dykes wrote that if the county considers a private company’s cryptocurrency mine to not be permitted, “it is clear” if the county sues “any such action should be directed to Red Dog Technologies.”

The lawsuit, though, notes that a July 7 request before the planning commission mentioned “a data center for BrightRidge” and never mentioned a private partner.

“Instead, through an undisclosed commercial business relationship with unidentified contracting parties, BrightRidge had agreed and consented to Red Dog Technologies, LLC’s use of the property to operate a Bitcoin blockchain verification facility.”

Washington County Mayor Joe Grandy, a BrightRidge board member, has been called as a witness in the case.

Grandy informed county commissioners of that fact Monday night and announced he was taking a leave of absence from the board for the duration of the litigation.