Greenidge Generation LLC sued the state Department of Environmental Conservation in Yates County on Thursday to block the agency’s order to shut down the Dresden power plant by Sept. 9.
The company, which operates a bitcoin mining facility at the power plant, had announced since May that it would seek a preliminary injunction in state court to overturn the agency’s denial of Greenidge’s application to extend its Title V aviation permit.
On May 8, the DEC dropped the company’s two-year-old appeal of the DEC’s original denial of the air permit in 2022.
On June 4, the agency wrote a letter to Greenidge stating that its existing air traffic authorization would expire on September 9 and that it “expects Greenidge to responsibly cease operations on that date.”
In his Article 78 lawsuit, Greenidge alleges that the DEC “weaponized” a provision of the state’s 2019 Climate Leadership and Community Protection Act (CLCPA) to justify its denial of the air permit.
The agency had relied on a provision in the law that requires state agencies to consider whether their permitting decisions are consistent with state climate goals under the CLCPA. However, the projected greenhouse gas emissions from the Greenidge facility did not pass that test.
The lawsuit alleges that the agency’s conclusion “sets a dangerous precedent because it effectively replaces legislative judgment with unfettered regulatory discretion.”
Greenidge is represented by Yvonne Hennessey of Barclay Damon, the law firm that has represented the company since its acquisition by Connecticut-based Atlas Holdings in 2014.
The agency is represented by Attorney General Letitia James and/or her assistant attorneys general. The lawsuit also names acting DEC Commissioner Sean Mahar as a defendant.
A hearing in the case is scheduled for September 3 before Yates County Superior Court Judge Jason L. Cook.
The lawsuit seeks to test the scope of DEC’s authority to make permitting decisions for power plants based on the emissions they produce.
NYSEG started operating the Greenidge Power Plant in 1937. It ran on coal for over 70 years. Connecticut-based Atlas Holdings acquired the plant in 2014 and converted it to natural gas in 2017. Initially, it operated only intermittently to provide emergency power to the grid when needed.
But after the company ramped up its bitcoin mining in 2020, the 106-megawatt plant’s energy output and greenhouse gas emissions increased dramatically. It continues to supply electricity to the grid at times, but most of the energy generated has been used to power bitcoin mining machines.
Meanwhile, the state’s climate law passed in 2019 required New York State to reduce its greenhouse gas emissions by 40 percent from 1990 levels by 2030 and by 85 percent by 2050.
The DEC required Greenidge to demonstrate that its emissions complied with CLCPA rules. The company attempted to do so in an analysis dated August 2, 2021. But shortly after the DEC reviewed the analysis, then-DEC Commissioner Basil Seggos tweeted, “Greenidge has not demonstrated compliance with New York’s climate law.”
The lawsuit states that Greenidge is the first company to be denied renewal of its air permit due to conflicts with the objectives of the CLCPA.
However, the state has denied new permits to two natural gas power plants – NRG’s Astoria plant in Queens and the Danskammer plant in Newburgh – over concerns about possible violations of climate change law.
In his lawsuit filed on August 15, Greenidge asks Judge Cook:
- To overturn both the DEC’s denial of its application for an air permit renewal in June 2022 and the agency’s dismissal of its intra-agency appeal.
- Entering a declaratory judgment that DEC misinterpreted and misapplied CLCPA.
- Issued a ruling that the DEC does not have the authority to deny renewal of a permit based on a change in the primary purpose of the power plant.
- To rule that the DEC does not have the authority to “usurp” the role of the state Public Service Commission and the New York Independent Systems Operator (the power grid) in determining when power generation facilities are needed.
- DEC should be prevented from demanding that the power plant be shut down.
Greenidge has had financial problems in recent months and its common shares fell to an all-time low this week.
On August 14, the company filed its 10th quarterly report with the U.S. Securities and Exchange Commission (SEC), covering the fiscal quarter ended June 30. In it, the company informed investors that it intended to file suit, which it did the same day.
But there was also a warning:
“Although the Company continues to work to implement options to improve liquidity, we can provide no assurance that these efforts will be successful and our liquidity could be adversely affected by factors beyond our control … including our inability to obtain and maintain the permits and licenses required to operate our facilities, including the Title V Air Permit for the New York facility, or the costs we incur in such obtaining or maintaining.”
The 10Q announcement also noted that “there is significant doubt about our ability to continue as a going concern.”
Peter is a three-time Pulitzer Prize-nominated reporter who covers environmental issues in his first digital publication, The Water Front. He has won a number of awards from the Associated Press, UPI and the Society of Professional Journalist. His reporting on environmental issues continues to appear in prominent New York publications and is available through an exclusive content partnership on FingerLakes1.com. Have a question or tip? Send it to (email protected).
