Mining company Stronghold fined $1.4 million for violating electricity market rules to mine Bitcoin

Odaily Planet Daily News After a federal investigation found that mining company Stronghold Digital violated energy market rules while prioritizing its bitcoin mining business, the company agreed to pay more than $1.4 million in fines and refunds. Stronghold Digital and its subsidiary Scrubgrass Reclamation Company operated the 85-megawatt Scrubgrass Power Plant in northwestern Pennsylvania as a capacity resource in the PJM Interconnection energy market from 2018 to 2022. According to the settlement agreement issued by the Federal Energy Regulatory Commission (FERC) on January 30, Stronghold has a contractual obligation to provide its available power to the PJM grid to help ensure grid reliability. However, the FERC Enforcement Office determined that Stronghold failed to fulfill this obligation between June 2021 and May 2022, and instead diverted electricity to its bitcoin mining business. According to FERC’s investigation, Scrubgrass underreported the available power capacity it offered in the market by 67% of day-ahead power and 69% of real-time power. It diverted power to bitcoin mining instead of providing it to PJM by 57% of day-ahead power and 59% of real-time power. In addition, FERC noted in the settlement order that Stronghold purchased power from PJM at wholesale prices 24% of the time, and some of that power was misclassified as “station power” rather than used for necessary power plant operations. As part of the settlement, Stronghold and Scrubgrass will reimburse PJM for $678,635 in improper revenue and pay a $741,365 civil penalty to the U.S. Treasury. The company must also file compliance reports for at least two years and provide employee training on market rules.