County takes a stab at regulating deafening noise from crypto mines

Oct. 25—Proposed regulations on crypto mining — a computer network system known for around-the-clock, ear-splitting noise heard from a mile away or more — were presented during a public hearing at the Haywood County commissioners meeting last week.

No one spoke up during the hearing, however — perhaps because it was tucked inside the agenda item titled "public hearing concerning amendments to multiple ordinances." So many who would have been interested may not have known it was on the agenda.

The county planning board spent nine months developing the regulations, which were spurred by public concerns that crypto mining operations could move in to the county and cause havoc for those who live nearby. Crypto mining consists of massive computer banks whirring away continuously to generate digital currency.

"Crypto mines are loud and the mining capacity is increased at nighttime. Crypto mines use tremendous amounts of electricity, create very few jobs and avoid business equipment taxes by leasing the mining equipment," Jodie Ferguson, Haywood County development services director, explained during the public hearing.

During the nine-month process, the planning board met with electricity providers, visited operating crypto mines in the region and spoke with officials in adjoining counties about how they have approached regulations on the industry. After the fact-finding mission, the planning board considered several options to regulate the industry.

The board looked into amending the county noise ordinance, but found out it is illegal to impose restrictions on just one type of industrial use.

"What we found was we didn't have noise protection on any other uses, so it was not proper to carve this one out," said Dave Gildersleeve, the county planning board chairman. "We backed away from noise standards and tried to accomplish same thing through a set back."

The result is an amendment to the county's existing high-impact ordinance that requires crypto mining operations to be located a minimum of 750 feet from any neighboring property line.

The high-impact development ordinance was passed in 2016 to ensure activities such as an asphalt plant, landfill, a chemical or explosives facility, hazardous waste facility, mining, quarrying or resource extracting or combustible bulk fuel facilities aren't located near sites with "vulnerable populations." Such populations are defined as schools, child care/facilities, hospitals, nursing care homes, retirement and assisted living facilities and correctional institutions.

The ordinance requires vegetative buffers, fencing separations and setbacks ranging between 25 and 1,000 feet, depending on the proposed activity.

The proposed amendment specifically deals with crypto mining and data centers, which would require a 750-foot setback under the proposed changes.

"We felt it was appropriate at that distance," Gildersleeve said. "Jackson County had something very similar, and we felt comfortable with it. That's enough so it isn't harmful to hearing."

During the public hearing, Ferguson spoke of the visit to Cherokee County, where the commissioners there have dealt with complaints about the piercing noise generated by the two crypto mines in their county. The sound there travels much further than 750 feet, however, which would be the required set back under Haywood's proposed rule.

Haywood County leaders were told that the lack of regulations allows the crypto miners to get their foot in the door, and once this happens, it is very difficult to get it closed. That's why Cherokee County officials recommended a moratorium until sufficient regulations could be established, Ferguson said. Buncombe followed that course of action while crafting its crypto mining regulations.

Commissioner Tommy Long said the topic of crypto mines has been discussed at the state level and has even received national attention.

"They're a drain on the power grid, and if they are in the wrong place, it's like a mad hornet's nest in your ear 24/7. We appreciate you looking into this and bringing it back to us," he told the planning staff.

In a later interview, Commission Chairman Kevin Ensley said he sees no benefit to the community from crypto currency types of uses.

"They offer no jobs or economic benefits to the county, only noise and a drain on the electric grid," Ensley said. "They can only be categorized as a nuisance."

Ensley said he would follow the planning board's lead on the issue.

Power use

Gildersleeve said he believes the cost of power in Haywood will be the main factor in determining whether a crypto currency mining operation will move in.

"The issue with crypto mining is that really there is no place for it to locate because of the power requirements," Gildersleeve said. "The old paper plant is probably sufficient, but the cost of power is almost prohibitive. That's why you see so many going out to Texas and other places that are wide open. There are better places to go than Haywood County for crypto mining."

Though at least one power company serving Haywood has had inquiries about a crypto mine, Ferguson said the board was told the electric rates are too high for an industry where cheap power is a primary driver. Though should this type of industry opt to set up in Haywood, power companies would be required to serve it.

"Essentially Duke Power and HEMC view crypto miners as an industrial customer and would provide electricity once an agreement was reached," Ferguson wrote in an email response. "When HEMC came to the planning board for a learning discussion, they conveyed that they had received inquiries. However, the cost of infrastructure, the covid materials shortage on electrical equipment, and the cost of electricity made Haywood County unattractive."

Proposed changes

A new section is proposed to the existing high-impact ordinance added an eighth category of industries to be regulated — that of data centers and cryptocurrency data centers and farms.

The proposal then adds three regulated entities: a Class 1 data center, a Class II cryptocurrency data center and a cryptocurrency server farm.

The data center is defined as a facility used for storage, management, processing, and transmission of digital data that houses computer and/or network equipment, systems, servers, appliances, and other associated components.

"Such facility may include air handlers, power generators, water cooling, storage facilities, utility substations, and other associated utility infrastructure to support sustained operations at the data center," the ordinance states.

The class II cryptocurrency data center is defined as leased, owned, or used boundaries or areas of floor space and/or land devoted to the operating data processing equipment for commercial cryptocurrency mining, while the server farm is defined as four or more interconnected computers/miners housed together in a single facility whose primary function is to perform cryptocurrency mining or associated data processing.

A principle use setback requires that any crypto currency facility be 750 feet from the company's property line, and must be at least 1,000 feet from the facilities considered to have vulnerable populations.

If a crypto-miner wanted to locate in Haywood County, they would have to reach an agreement with the power provider and find a piece of property that was 750 feet from the inside the property boundary on all sides, Ferguson explained.

"This was established to protect all citizens and not just the protected entities (vulnerable populations). The planning board looked at regulation from other communities in our region. At the time, Macon County, that has a very similar ordinance, was considering the 750-foot set-back. The staff and planning board analyzed this approach and found it to be an effective performance measure to give citizen protection," Ferguson wrote.

Other ordinance revisions included under the agenda item titled "public hearing concerning amendments to multiple ordinances" included "housekeeping" changes to the emergency management, county grounds usage and flight-seeing helicopter operations ordinances to ensure they were in compliance with state law, said County Attorney Frank Queen.

There were no comments made on these ordinances at the public hearing. The commissioners are scheduled to vote on the proposed changes at the Nov. 6 meeting.