20220412Comments.pdf

ii
Elizabeth A. Koeckeritz (ID Bar #7670)
GIVENS PURSLEY LLP
601 West Bannock Street
Post Office Box2720
Boise, Idaho 83701-2720
Telephone: [phone]
Facsimile: 208-388-1300
eak(@ givenspursley. com
16153695_7.doc (16189-2)
Attorneyfor 2140 Labs LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
TN THE MATTER OF THE APPLICATION
OF THE IDAHO POWER COMPA}ry FOR
AUTHORITY TO ESTABLISH A NEW
SCHEDULE TO SERVE SPECULATIVE
HIGH-DENSITY LOAD CUSTOMERS.
Case No. WC-E-21-37
COMMENTS OF 2140 LABS LLC
2140 Labs LLC (*2140 Labs"), by and through its attomeys of record, Givens Pursley
LLp, respectfully submits the following comments.
Ixtnopucttotrt
On November 4,202l,ldaho Power Company ("lPC") submitted an application
("Application") to the Idaho Public Utilities Commission to establish a new schedule "to Serve
Speculative High-Density Load Customers" (the "Schedule"). IPC referenced "[s]urging
customer interest" from "lT viable and unique inquiries totaling over 1,950 MW" as the impetus
for this Application.r However, discovery has revealed that no apparent demand is driving this
schedule nor is there fully developed research to support it.
Customer demand does not necessitate this Schedule. None of the 17 inquiries are
pursuing service.2 Nor are there "any existing customers who would qualiff for Schedul e 20."3
I Application at l, 5.
2 Company's Response to Second Production Request of the Commission Staffto the Company at 2.
3 Application at 16.
2140 Llns LLC'S couurxrs - I
Moreover, research does not support the negative light in which IPC has painted
cryptocurrency or the Schedule itself. IPC has stated that it "has not researched an exhaustive list
of similar tariffs or commission orders in other jurisdictions.'a Instead, the Company relies on a
single public utility district in the State of Washington.s IPC has characterized blockchain as
highly volatile and "speculative" but provides little support for this negative framing of the
industry.
2140 Labs respectfully requests that the Commission consider renaming the Schedule as
"Emerging lndustry" as it more accurately reflects the state of the industry and positions Idaho to
benefit from the economic development opportunities presented by cryrptocurrency.
CouunNr
1. Labeling the industry as "Emerging" rather than "Speculative" would help
position Idaho as a blockchain-friendly state, poised to benelit from the
industry.
IPC has not provided any rationale for labeling the load consumption, the crrrency
(bitcoin), and the mining industry as "speculative": an adjective that signals a negative sentiment
to mining businesses and the industry as a whole. In response to the request to explain why the
adjective "speculative" is used in an imprecise manner throughout the Application, IPC referred
to its "evaluation and classification of industry and commodity as speculative . . . to include
factors such as volatility, lack of credit history, or ability to demonstrate financial viability."6
These characterizations are not borne out by the facts.
Cryptocurrency mining is one of the most consistent and predictable tlpes of load. Unlike
residential users, whose load fluctuates based on certain hours (like using the air conditioning,
cooking dirurer, and doing laundry during peak hours), mining computers consistently run around
a Company's Response to First Production Request of the Industrial Customers of Idaho Power to the Company at 3.5Id.
6 Company's Response to First Production Request of 2140 Labs LLC to the Company at2-3.
2140 Lans LLC's couureNrs - 2
the clock at a constant power draw.7 Because of this consistency, it is possible to predict a
miner's power consumption today, next month, and for the foreseeable future with a very high
level of accuracy. The load consumption is not speculative; it is consistent and predictable.
Labeling bitcoin as "speculative" is also inaccurate. IPC states that the price of bitcoin
has proven "highly volatile."s But IPC relies on specific snapshots from relatively short
timeframes. The historical compound annual growth rate ("CAGR") over the last ten years
reveals that bitcoin's rate is l25Trsignificantly higher than Gold (6%) and the S&P 500
07%).e This longer time frame is a better indicator of bitcoin's performance than the short
windows on which IPC relies. Additionally, the CAGR indicates that bitcoin has outperformed
other commodities over a longer timeframe.
Moreover, a commodity should not be labeled as speculative simply because it is
speculated on. [n the case of bitcoin, although speculation has risen as a share of bitcoin tading,
the level of overall speculation on bitcoin trading is relatively low compared to traditional
markets. ln202l, the estimated exchange volume (speculative tading) was around $2 trillion,
while the amount of bitcoin actually used as a payment network was around $800 billion.
Accordingly, the ratio of speculation to actual use was around 2.5. In the same year, the
estimated exchange volume of oil was around $81 tillion, while the annual consumption
hovered around $2.6 trillion: a ratio of 31.r0 Despite this, no one would argue that the oil as a
commodity is speculative, simply because the commodity price was speculated on. IPC's
7.See Slgj series specifications, Bitmain, April 11,2022, Slgj series Specifications - BITMAIN Support. These run
at around 3000W +-syo,24171365. ^See Bitcoin Mining, Investopediq Bitcoin Mining Definition (investopedia.corn).
8 Company's Application at 5-6.
e _Bitcoin Macro Charts, The Case for Bitcoin, April I l, 2022, https:iicasebitcoin.com/charts.
t0 See Today in Energt,U.S. Energy Information Administration, April 11,2022, Today in Energy - Daily Prices -
Prices - U.S. Energy Information Administration (EIA); CME Exchange Volume Report - Monthly, April 1 1,2022,
https://www.cmegroup.comidaily bulletin/monthly volume/Web Volume_Report CMEG.pdf; Statistics, World
Federation of Exchanges, April I1,2022, https://www.world-exchanges.ors/our-work/statistics; CoinMarketCap,
April 1 1,2022, https://coinmarketcap.com; Coinmetrics, April I1,2022, https://coinmetrics.io.
2140 L.l.ns LLC'S courr,mxrs - 3
characteization of bitcoin as "highly volatile" does not accurately capture the facts about this
commodity.
Finally, the industry-while new-presents the same risks as all other emerging
industries. Mining is a new type of business that has been growing rapidly since the inception of
Bitcoin in 2009. While there are inherent risks to any new venture, this does not equate to
speculation. The economics of mining depend on miners who can run their operation with the
lowest costs; these miners will be the most successful. Entrepreneurs take a calculated risk to
start a mining operation, like every other type of emerging industry.
2140 Labs suggests renaming the schedule "Emerging Industry" rather than "Speculative
High-Density Load." Cryptocurrency mining presents strategic economic development
opportunities. Setting up a mining operation requires work from electricians, electrical
contractors, construction teams for perimeter fencing, security, building contractors, land
suryeyors, HVAC contractors, and design work supported by the power company itself. Miners
are an ideal customer for the power company because they are customers who consistently
function with a high load. Additionally, ffiy new mining operations necessarily operate as
businesses, which require a host of administrative overhead, including legal, HR, and accounting
and payroll services. ln2140 Labs' case, it is growing this business in Boise, using local talent to
manage its operations. As the industry continues to grow, Idaho can and will benefit from this
uptick in economic activity. Other states, such as Wyoming, are currently positioning themselves
as blockchain-friendly. Idaho would benefit from positioning itself as a blockchain-friendly state
as well.
2140 Llss LLC'S corrrrcxrs - 4
DATED this I 2th day of April, 2022.
GMENS PURSLEY rr-p
/s/ Elizabeth A. Koeclceritz
Elizabeth A. Koeckeritz
Attorney for2140 Labs LLC
2140 Lms LLC's connrxrs - 5
CERTTFICATE OF SERVICE
I IIEREBY CERTIFY that on the l2th day of April,2022, a tnre and correct copy of the
within and foregoing WRITTEN COMMENT OF 2140 LABS LLC in Docket No. IPC-E-21-37
was served electronically to:
Lisa Nordstrom
Regulatory Dockets
Idaho Power Company
lnortstrom@idahopower. com
dockets@ idahopower. com
Connie Aschenbrenner
Rate Design Se,nior Manager
Idaho Power Company
caschenbrenner@idahopower. com
Peter Richardson
Richardson Adams, PLLC
peter@ richardsonadams. com
Don Reading
6070 Hill Road
Boise,ID 83703
dreadinq@ mindsprin e. com
RileyNewton
Depuf Attorney General
Idaho Public Utilities Commission
riley.newton@puc. idaho. gov
Commission Secretary
Idaho Public Utilities Commission
secretary@Fuc. idaho. eov
/s/ Elizabeth A. Koeckerttz
Elizabeth A. Koeckeritz
2140 L.lrs LLC'S couw,xrs - 6