ROGERS — Cryptocurrency mining got its third going-over by different legislative committees in 15 days on Wednesday, but a measure to consider repeal of protections for the industry failed in a voice vote.
Crypto mining is the process of reaping fees for accurately tracking and validating transactions in cryptocurrencies such as Bitcoin. The process requires the use of banks of computer servers cooled by fans or other means. One center for such mining, according to statements given at Wednesday’s meeting, can use as much electricity as 7,000 or more homes. The noise from banks of the computers’ fans, which spin at rates of up to 100 times a second according to industry statements Wednesday, can create a noise nuisance, critics say.
The House and Senate committees on City, County and Local Affairs met jointly Wednesday at the Rogers Convention Center to review the state of crypto mining in Arkansas, taking statements and asking questions of industry representatives, an electric utility spokesman, local leaders and critics of the centers.
Act 851 of 2023 states a “digital asset mining business” may operate in the state so long as it complies with state law and with local ordinances regarding noise, operations and safety. In effect, the law prevents local ordinances specifically excluding data mining.
A data mining operation employing just two or three people uses as much electricity as thousands of homes or a major industry employing hundreds, Sen. Bryan King, R-Green Forest, said during Wednesday’s meeting. King proposed an interim study bill to repeal Act 851, which the committees rejected in a voice vote. An interim study bill allows consideration and debate by the committee.
King proposed a repeal at a meeting July 24 of the Senate Children and Youth Committee, which met at North Arkansas College in Harrison. Harrison is the site of a proposed crypto mining business, stopped at least temporarily by the city. Harrison Mayor Jerry Jackson testified to the committees on Wednesday in support of King’s repeal proposal.
Entergy Arkansas spokesman John Bethel told the committee all the 15 crypto mining operations so far in Arkansas are in Entergy’s service area. The centers use up less than 3% of the utility’s capacity and are paying under discounted rate agreements that allow the utility to suspend service with 30 minutes notice, so the utility has plenty of service capacity remaining, he said.
Every crypto center moving in, though, diminishes the utility’s capacity, King argued, with little economic benefit such as jobs to the communities in which they move. Sen. Mark Johnson, R-Little Rock, spoke up during the meeting to note the centers appear to have an incentive to move into quiet, rural communities because those have few, if any, zoning restrictions on these businesses.
Rep. Steve Meeks, R-Greenbrier, said he would like to see Act 851 repealed during a special legislative session. Meeks made his remarks after an almost five-hour meeting Aug. 1 of the Joint Committee on Advanced Communications and Information Technology on the crypto mining issue. Meeks is co-chair of the communications committee.
Rep. Scott Richardson, R-Bentonville, is a local affairs committee member and a director of technology for an engineering firm. He has a master’s degree in information systems from Arkansas Tech University. He said after the meeting that much of the controversy about Act 851 arises from it being passed at the very end of the session along with a batch of other bills. He said legislators are already less willing to suspend House rules to quickly pass bills.
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