Alberta Utilities Commission fines another unlicensed power generator mining bitcoin

In a settlement dated Tuesday, Energy Sustain Services is to pay a $10,000 fine for operating the power plant in Brazeau County, southwest of Edmonton, between February and May of 2022.

"(Energy Sustain Services) believed that there was no requirement to obtain commission approval to construct and operate the power plant," say documents filed by the commission. 

It's at least the third fine over the last year levied by the commission on unlicensed generators powering bitcoin mines.

The commission says the company entered into an agreement with Response Energy to use gas from a previously suspended well to power 87 mines in addition to the well's operation. Response had suspended the well after closing the pipeline that connected it to its gathering system. 

The two companies consulted with local residents and conducted what they felt were adequate environmental assessments, including with regard to noise levels.

But on Feb. 15, when the plant started operating, the company immediately started getting noise complaints, say the documents. Straw bales were stacked to absorb the sound, but the commission began receiving complaints on March 8.

An investigator later found noise levels exceeded guidelines. Energy Sustain Services was not charged with those violations because it wasn't clear whether the noise came from the generator or the bitcoin miners.

Alberta law says generators smaller than one megawatt that supply power to a single user don't require regulatory approval. 

The plant's capacity was almost 1.5 megawatts. Its electricity was used by both companies. 

"(Energy Sustain Services) erroneously believed that the power plant fell under the small power plant exemption," the commission wrote.

"These are not the sort of mistakes (i.e., the reasonable belief in a mistaken fact) that would ground the defence of due diligence."

The generator has since been replaced by a low-noise machine with about one-third the capacity. 

The fine levied against Energy Sustain Services is a small fraction of those previously handed out by the commission. 

In February, Avex Energy was fined more than $240,000 for running a natural gas-fired generator in the County of Stettler in central Alberta, while bypassing regulatory tests for safe and unobtrusive operation. 

In December, Vancouver-based Green Block Mining reached a settlement agreement of more than $400,000 for running five megawatts of generation in Sturgeon County west of Edmonton. It was also was ordered to never operate in Alberta again.

In both cases, the power was being sold to bitcoin miners, which require large amounts of electricity to run their computer servers. 

This report by The Canadian Press was first published May 9, 2024.