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Central Washington Utility In Pursuit Of 'Rogue' Bitcoin Miners

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File photo. Chelan County Public Utility District managers want to shut down unauthorized bitcoin operations.

A public utility in north central Washington state wants to root out a new kind of outlaw: the rogue bitcoin miner.

Bitcoin “miners” don’t wear hardhats or carry pick axes. Rather, they lend computing power to earn virtual currency. Their specialized computers process and record network transactions 24/7. In the Pacific Northwest, bitcoin operations are concentrating around The Dalles, Moses Lake and the Wenatchee Valley to take advantage of cheap hydropower.

Chelan County Public Utility District managers say some miners are creating power spikes and fire risk by secretly setting up in apartments, vacant businesses and mini-storage units—places frequently unsuited to high-demand, nonstop electricity use.

This week, the Chelan County PUD board directed their staff to take “all necessary steps” to hunt down and shut down unauthorized bitcoin operations.

“Not only are we concerned, we’re incensed that individuals are putting people at risk,” Commissioner Steve McKenna said on Monday. “We’re not going to tolerate it. This is a strong message, and I want to make that very clear.”

Steps that the utility staff can take to uncover rogue miners resemble strategies used in the past to detect illegal indoor marijuana grows. These include monitoring for extraordinary, sustained electricity usage spikes.

When the PUD discovers unauthorized cryptocurrency operations, it can disconnect service and potentially report unauthorized loads to fire officials and to law enforcement as power theft because the specific commercial use should have a higher rate.

The PUD commissioners said they also want to explore new fees or penalties to impose on rogue miners who overload circuits and threaten the safety of the electric grid.

There are legitimate operators in this sector who obtain permits and inspections before switching on their mining rigs. One of these entrepreneurs, Salcido Enterprises CEO Malachi Salcido, said in an interview Tuesday that he was pleased that Chelan County PUD was separating the bad from the good.

Now semi-retired, Tom Banse covered national news, business, science, public policy, Olympic sports and human interest stories from across the Northwest. He reported from well known and out–of–the–way places in the region where important, amusing, touching, or outrageous events unfolded. Tom's stories can be found online and were heard on-air during "Morning Edition" and "All Things Considered" on NPR stations in Washington, Oregon, and Idaho.