Jackson County is home to a new cryptocurrency mine — a surprise for many local, county officials

Owners of a rural hydroelectric plant in Jackson County have partnered with a New York-based company to start a cryptocurrency mining operation.

Located in the popular Lake Arbutus resort in west central Wisconsin, the Hatfield Dam and Power Plant have been in operation since 1908. In late March, Digital Power Optimization announced that they have partnered with power plant owners and a private investor. to start “industrial-scale mining operations,” according to a company press release.

Cryptocurrency mining uses powerful computers to verify online transactions that use cryptocurrencies to create new currencies like bitcoins.

Alex Stoewer, chief operating officer of Digital Power Optimization, said his company is helping utility companies and renewable energy developers set up mining as a way to monetize excess energy generated by their facilities.

“In many cases, you have power plants that are in the wrong place or can only operate a few times,” he said. “Or, in many cases, you’ll have negative energy prices that I think a lot of people don’t realize, where more energy is produced than the grid can handle.”

Stoewer said the Hatfield plant fit that bill, with low energy demand in rural areas and years of deferred maintenance projects due to low profits. He said the potential revenue from cryptocurrency mining has made the cost of repairing the facility make financial sense to homeowners, who are a group of investors in and out of Wisconsin. And he said that about half of the energy generated by the now restored plant will still be sold to the grid.

“I think this is actually a good way to generate jobs and bring investment to rural areas that would otherwise not have it and fix old infrastructure that produces green energy,” he said. “We’re very excited for our mission to do that, and we think it’s something that can be repeated over and over again.”

He said the plant has four employees: three who operate the power plant and one IT station that serves the computers used for bitcoin mining.

As cryptocurrency mining faces more criticism over the industry’s massive energy use, Stoewer said investing in renewable energy sources such as hydropower is important to reduce environmental impact and energy costs.

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Although mining is already underway, many municipal and county leaders were unaware of the existence of the new business.

Peter Segerson is on the City of Adams Supervisory Board, which includes Hatfield and the power plant. Like all local officials contacted by Wisconsin Public Radio, Segerson said he was unaware of the cryptocurrency mine. He said he regularly walks his dog through the power plant and that he has not noticed any change in operations or noise level coming from the facility.

Segerson said the plant has changed owners several times in recent years and it was no surprise that owners were looking for new sources of income.

“That’s a building over 50 years old. They probably need maintenance funding and have had some issues with their infrastructure over the years,” he said. “There was a flood, I think, in ’93 and then another in the early 2000’s and they had to rebuild one of the canal dikes and things like that.”

But Segerson said that in general, most people in the community don’t think much about the facility.

It is not the only cryptocurrency mining operation to appear in the state this year.

A Chinese company called Future Data Technology opened its mining operation at a former paper mill in Park Falls in February, according to WXPR in Rhinelander. Local officials also seemed unaware of this cryptocurrency mining operation before it began. Park Falls City Administrator Brentt P. Michalek said in a statement on Facebook that city officials had not participated in the proposal and that it was up to property owners to share information publicly about it. He also said in the statement that city officials did not “believe that this use is the best use of the property in terms of jobs for our area.”

Stoewer said his company is happy to talk about its new operation, but that they did not feel the need to announce it in Jackson County.

“I think what we’re doing is definitely beneficial for the area, but I think there’s no real need to go and put up a big sign saying we’re mining bitcoins,” he said.

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