New York Court Reverses Decision on Cryptocurrency Mining Company’s Acquisition of Power Plant

News | March 19, 2024 By:

On Tuesday, March 5, 2024, the New York Supreme Court Appellate Division Third Department reversed a lower court’s decision regarding plans by a cryptocurrency mining company to acquire a power plant.

Digihost International had proposed acquiring the North Tonawanda power plant from Fortistar North Tonawanda to operate a cryptocurrency mining operation. They petitioned the New York State Public Service Commission (PSC) seeking approval, with Fortistar supporting the transaction.

However, environmental groups Clean Air Coalition of Western New York and Sierra Club opposed the plans. They argued that cryptocurrency mining would undermine the state’s climate change goals as outlined in the Climate Leadership and Community Protection Act. This law requires agencies to consider how decisions impact the environment and disadvantaged communities.

The PSC initially approved the transaction in September 2022 without addressing the environmental concerns. The groups asked for a rehearing and also filed a lawsuit against the PSC challenging its decision. A lower court had dismissed the case, finding the rehearing request meant the original decision was not yet ripe for judicial review.

On appeal, the Third Department disagreed and reinstated the lawsuit. The court found that under the State Administrative Procedures Act, the PSC’s original September decision was binding and could not be retroactively changed. While the PSC did later deny the rehearing, that did not negate the petitioners’ ability to challenge the initial ruling in court.

The court also concluded the case was not moot, even though the transaction had closed, as alternative remedies might still be available such as requiring environmental mitigation. It ruled the petitioners had demonstrated legal standing to sue as their members lived near the plant and could face increased emissions impacts differing from the general public.

The case was sent back to the lower court for further proceedings. The decision means the environmental groups can continue their legal challenge to the PSC’s approval, arguing it did not properly consider the transaction’s climate and community impacts as mandated by New York law. This case sets an important precedent for how such factors must be weighed in cryptocurrency mining industry approvals and expansion plans going forward.

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