Ninth Circuit Affirms Special Power Rate for Cryptocurrency Miners

On March 11, 2021, the U.S. Court of Appeals for the Ninth Circuit affirmed a decision approving of Grant County, Washington’s, special power rate for cryptocurrency miners. In Cytline, LLC, et al. v. Public Utility District No. 2 of Grant County Washington, a group of cryptocurrency companies sued after a Grant County utility district created a special energy rate applicable only to cryptocurrency miners. The companies had moved to Grant County because the county had some of the lowest rates for electricity in the country. Grant County reported that the energy demands from cryptocurrency miners more than doubled the utility district’s average load. In response to this increase, Grant County issued a new rate schedule for evolving industries, including cryptocurrency mining. The companies challenged the county’s approach under the commerce and due process clauses of the U.S. Constitution, Section 20 of the Federal Power Act, and several state laws. The Eastern District of Washington granted summary judgment to the county.

The Ninth Circuit affirmed. It found that the new rate structure did not violate the commerce clause because the rate did not discriminate against out-of-state entities and demonstrated no intent to discriminate against interstate commerce. It also found that the new rate structure did not violate substantive due process because the companies were given an opportunity to participate in the process that resulted in the new rate structure. Last, the Ninth Circuit found that Section 20 of the Federal Power Act does not create a private right of action.

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