Court Orders New Review of Digihost’s Power Plant Deal in New York

The Supreme Court of New York has directed the New York State Public Service Commission (PSC) to reassess Digihost’s acquisition of a 60-megawatt gas power plant for Bitcoin mining in North Tonawanda, New York.

Digihost entered into a purchase agreement in 2021 to acquire the Fortistar gas power plant from North Tonawanda Holdings. In April of that year, the company filed a petition with the PSC, seeking confirmation that the transaction required only a limited review.

In 2022, the PSC issued a declaratory ruling granting Digihost’s request, despite objections from environmental groups. Critics warned that operating the power plant continuously for Bitcoin mining could increase greenhouse gas emissions by “up to 3,400%” compared to prior usage levels.

In response, the Clean Air Coalition of Western New York and the Sierra Club, represented by the Earthjustice organization, filed a lawsuit in 2023 against both the PSC and Digihost. The lawsuit alleged that the PSC violated administrative procedures and failed to align its decision with New York’s Climate Leadership and Community Protection Act.

On Thursday, a New York Supreme Court judge ruled to annul the PSC’s declaratory ruling, sending Digihost’s petition for limited review back to the commission for further proceedings. The court emphasized that the PSC must now address the environmental impact of the transaction.

The ruling does not overturn Digihost’s acquisition of the power plant but requires the PSC to revisit its approval process, factoring in the potential emissions consequences and exploring mitigation options.

Digihost previously announced in 2021 that the acquisition would boost its Bitcoin mining hashrate capacity by 2 EH/s. As of October 31, the company’s operational capacity stood at 2.75 EH/s, with a realized hashrate of 1.72 EH/s.