December 1, 2025 • 23 mins
In the latest episode of Public Power Now, David Plotz, General Manager of Washington State’s Lewis County PUD, discusses the PUD’s development of a Clean Energy Implementation Plan, details the PUD’s current generation mix and talks about how partnering with bitcoin mining companies as a form of data center load can enhance a utility’s appeal.
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Episode Transcript
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Paul Ciampoli (00:09):
Welcome to the latest episode of Public Power
Now.
I'm Paul Ciampoli, APPA's newsdirector.
Our guest on this episode isDavid Plotz, General Manager of
Washington State's Lewis CountyPUD.
David, thanks for joining us.
Hey, Paul, thanks for invitingme.
Sure thing.
So David, just to get ourconversation started, I want to
give you the opportunity toprovide an overview of the PUD
in terms of things like itshistory, number of customers
(00:30):
served, and current generationmix.
I'd be happy to.
David Plotz (00:33):
So Lewis County PUD, founded in 1936, part of
the initiative number one ofWashington State.
We're about 35,000 customers,the meters out there, and we
have about 3,000 miles ofelectrical line out. We're a
pretty wide county.
We cover essentially the countyplus a little bit more. The
(00:55):
only part of the county we don'tcover is the city of Centralia.
They have their own municipallighting system there.
So we're a bit of a semi-ruralcounty, if you will. We're
about 95 miles wide east-westand 25 miles north-south
approximately.
We have a lot of trees and alot of long spans.
So, in that sense, we're notvery dense population-wise.
(01:17):
We're a Bonneville customer.
We've been slice block sliceproducts for the past decade
and a half.
And we're going to switch, wejust made the election to switch
to Bonneville's provider ofchoice contract, the blockless
shaping.
So, why we do that is we havesome generation inside of our
territory.
We have Caleb's Falls HydroProject.
(01:39):
And since we're essentially alarge, small utility or a small,
large utility, depending howyou measure it.
Because of that, we want totake a little bit more control
of our future state, bymanaging our own needs and
generation builds.
It's kind of I was looking atsome of the APPA statistics, and
(02:00):
if you look at the largest,hundred largest public power
utilities by electric customersserved in 2023, we're number 97.
So I wear that with pride.
I think it's it's good.
We're not that small anymore.
And we we have to take a lotmore control of our of our
destiny.
And our commissioners are allbehind that.
There we're doing a fewprojects, not only that for
(02:22):
renewable requirements such aswind, but we're exploring other
small hydro pump storage andgeothermal inside of the
district.
Paul Ciampoli (02:30):
Just real quick, just out of curiosity, any
elaboration you could do interms of the things that you
just said you were looking at interms of possible timing on
that?
David Plotz (02:38):
Sure.
And actually it's gonna be partof the conversation today, too.
I think I don't want to go toomuch into detail because we
we're really at the beginning.
Yeah, that's fine.
Um, but small hydro, we'rewe're we we abut the Cascade
Mountains.
And so because of that, there'sa number of small hydro
opportunities that haven't beentapped.
Pump storage as well.
(02:58):
Uh as it becomes moreeconomical, uh given the value
of energy, um, we we're lookinginto a couple of different
potential areas.
Geothermal probably has thebiggest flash in any media.
We're in the well down thefirst stages of investigation.
We haven't drilled any holesyet, but we're doing a number
of different studies inconjunction with uh PNL Pacific
(03:20):
Northwest National Labs uh andhave received grant funding for
that.
And I should also mention thisis just an aside, we're also in
the broadband space.
We do get about $50 million ofgrants, both state and federal,
to roll out broadband, fiberoptic broadband to the rural
communities and rural peoplehere in Lewis County.
(03:41):
So back to the generation,those projects are probably the
earliest seven years out.
So it's we're just at thebeginning stages.
Paul Ciampoli (03:50):
Gotcha.
Gotcha.
Okay, great.
So just switching gears here,David.
In a piece published over thesummer in the Northwest Public
Power Association's BulletinMagazine, you make the case that
partnering with Bitcoin miningcompanies as a form of data
center load can enhance autility's appeal by enabling
lower rates and reinforcing gridinfrastructure.
And a note for our listeners,along with his role at PUD,
(04:11):
David is founder and CEO of L EG R L E G L E J R, L L C and
Modulo LLC.
LEGR provides Bitcoin andfinancial tax auditing services
while Modulo specializes inphysical Bitcoin security
solutions.
So against that backdrop,could you provide for our
listeners additional details onthe potential benefits that can
(04:31):
flow from utilities partneringwith Bitcoin mining companies as
a form of data center load?
Sure.
David Plotz (04:37):
There's a lot to unpack here.
So I before I get too far, andI, you know, I want to be able
to explain it clearly for yourlisteners, but to understand
what I'm talking about, onereally has to understand the
concept of how Bitcoin operatesand how it's somewhat of a it
changes the paradigm for energyuse.
So I'll try not to be toobasic, but put simply is that
(05:00):
Bitcoin as a fine a newfinancial instrument and a new
product that the world hascreated is a is an energy
intensive, but at the same time,energy valuable use case for
utilities.
So what do I mean by that?
Utilities up to now had towe've been good.
We've been essentiallyfollowing load, building as as
(05:21):
need arose, when and we'republic power, so we're at cost,
and we're working hard to keepyou know safe, reliable,
low-cost electricity for ourratepayers.
And that's that still goestoday.
When Bitcoin showed up on thescene, it was a bit of a Wild
West, as I said in my magazinearticle.
But what has evolved out ofBitcoin for the past 15, 16, 17
(05:42):
years is uh people are realizingthat it has consistency of
value.
And that consistency of valueexists uh and not in the price
per the exchange rate to priceof other currencies, but the
consistency of how it works.
It just continues to operate ina in a method that's
predictable and understandable.
So Bitcoin miners tend to bealso called data centers.
(06:06):
And as everyone um who islistening probably understands,
data centers are coming.
And data centers providevarious different benefits.
There's data centers thatprovide your cloud storage,
there's data centers thatprovide Bitcoin mining, there's
data centers that do AI languagelearning and training models.
And those are the bigcategories, there's probably
more out there that I'm leavingout.
(06:28):
But Bitcoin mining holds a kindof a special spot in all of
that.
Because what is Bitcoin mining?
Bitcoin mining, when I explainto people, it's essentially the
accounting function of Bitcoin.
Now I'm a CPA and a CFA, so Itend to see things through these
lenses.
But all mining is doing is it'sproviding the accounting of
(06:49):
transactions of the globaltransaction of Bitcoin.
That's all mining does.
There's extra pieces to it,like the rewards aspect and how
the calculation is done, but allminers are doing is they're
trying to compete to make thenext journal entries on onto the
Bitcoin blockchain and berewarded for that.
Why that matters for utilitiesis because before this time, all
(07:11):
that accounting and thefinancial aspects are all being
done by banks, by various firmsin the world.
And that's fine.
It's but what Bitcoin broughtto the table was saying, hey,
anybody can do it.
Anybody can get involved.
And so businesses have sprungup around the country and around
the world that specificallyoperate as Bitcoin mining
(07:32):
companies.
And that's good for them.
We're a public utility, wedon't get into Bitcoin mining.
And I to make it clear for you,Paul and your listeners, I'm
not advocating right now, atleast, I'm not advocating for
public utilities to go out andstart mining.
That's a different businessmodel, and we're not in that.
And I don't want to be in that.
I leave it to the specialistsfor this Bitcoin mining.
What I'm saying is let's let'spartner up, let's figure out how
(07:54):
we can both benefit from thisenergy-intensive business.
So I outlined in my articlesome of these benefits, and and
I boiled it down to essentiallythree different things.
Um, you build ahead of growth.
And what does that mean?
It means you build newgeneration uh with anticipation
that these miners will show upand start mining with that new
(08:17):
generation.
So you don't have to try topredict your growth inside your
utility.
What you can say is if I buildthis, I can get ahead of it and
do power contracts with uhBitcoin miners for certain
periods of time, whether it'seight years or 16 years or
whatever it is, to take thatofftake.
And then when your other loadshows up after those points of
time, you can then have thatpower readily available for
(08:39):
those newly arriving loads.
And embedded in that is asubsidization aspect.
So up to now through history,we've built new projects, we
built dams, we built uh youknow, hydro projects, we built
uh gas, coal, whatever they maybe, with the idea that the load
will arrive.
But until that load arrives,existing ratepayers subsidize
(09:00):
that newly constructed project.
It's it's it's common, andideally, you don't build it too
far ahead that you go, youbankrupt your ratepayers.
So very good planning wasalways necessary, and it still
is today.
But the idea that you canpredict predictably bring in
Bitcoin mining right at thepoint of energization means
(09:21):
there's no morecross-subsidization.
In fact, it makes it even moreclear that you can say
historical preference raise offthe federal system can be
reserved for these types ofcustomers and for the newly
arriving loads, Bitcoin miningloads, you can be very specific
that these new projects are nowbeing used to deliver the energy
to them.
So that's the first point.
Second point is the concept ofdemand management.
(09:43):
As we move into a moreconnected and technologically
complex grid, demand managementis uh becoming more and more a
larger aspect of deliveringadditional capacity to existing
load and/or newly arriving load.
So uh shaving peaks, storingenergy over time, all those
aspects of demand management uhare important.
(10:06):
And Bitcoin miners can come inand also do the same thing.
And this has already been showndown in that ERCOT and over in
PJM, where miners have uhessentially contracted with the
uh system operators to curtailwhen demand is peaking, when
loads are high, or when pricesare high.
And the unique thing aboutBitcoin miners is they can shut
(10:27):
up very quickly.
Now, given cloud storage canprobably shut off just about as
quickly, but you don't want asituation where you cannot
access your files.
Uh, whereas Bitcoin miners, therelationship between being on
and being off uh is veryeconomical.
There's no kind of ongoingcarry costs when you shut down.
Your primary driver of yourcosts is your electricity bill.
(10:48):
So the moment you curtail as aBitcoin miner, your costs go
down significantly.
I won't say going to zero, butgoing near zero.
So that demand managementaspect is a second important
concept that utilities andBitcoin miners can uh both
benefit from.
And the third, and I think thisis the most important, most
related, Paul, to uh what we'redoing here in Lewis County is
(11:12):
we're looking at assets,generation, potential generation
locations around the county.
Great.
And if those are right neartransmission lines, even better.
But if they're not, then I needto start thinking do I want to
build transmission lines up intothe mountains that will be for
small hydro and may or may noteconomically pencil out?
And that has to be decidedearly on. Whereas if you have a
(11:35):
Bitcoin mining partner orcompany or companies, it doesn't
have to be just one, who aresaying, okay, for a short decade
or a decade and a half, we'rewilling to put our miners right
next to that hydro project up inthe mountains.
You don't need to build thetransmission line because what
they're doing is they'reconverting that energy generated
to Bitcoin and then convertingit to dollars for our utility.
(11:58):
And we use those dollars thento lower the overall rates for
the district.
So the idea there is we're nowusing Bitcoin and Bitcoin mining
to I don't want to saysubsidize, but essentially cap
the value that already existsinside the district's borders
for the benefit of the ratepayer.
Paul Ciampoli (12:17):
And in terms of of data centers, any elaboration
in terms of uh proposals in theservice territory for the PED?
You know, we have.
David Plotz (12:27):
And I can't get into it too much detail, but I
can tell you at a high level,we've been we've got a number of
inquiries over the past coupleof years.
I've only been in the feed forthree years, going on to the
fourth year now.
And over that time, we've had anumber of inquiries.
Our number one problem, though,is that these data centers want
a gigawatt and they won ityesterday.
Okay, well, we're we don't havea gigawatt of spare capacity
(12:48):
for sure.
Our utility only operatesaround 125 average megawatts.
So transmission's a big issue.
But if you've followed anythingaround Washington State or in
the Pacific Northwest,transmission's a big issue.
We essentially have a lot ofcongestion.
We're right on the I-5 corridorbetween Seattle and Portland,
and transmission new builds tothis area is a difficult thing.
(13:11):
So it takes time, and that timehas basically had people come,
look at the area, and thenleave.
Because even if we could getthe energy, getting in here is
the harder part.
So we've we've had a fewinquiries from smaller sized
data centers, but again, uh theyjust they tend not to move too
fast uh or they want to movefaster than what we can do
(13:33):
within this location.
Paul Ciampoli (13:35):
And I guess in terms of the kind of going
forward, uh on on the one hand,you you you you have the luxury
of kind of putting furtherthought into the idea of if if
another company comes at somepoint in the future, you may
have uh a better sense as to thepracticality of a proposal.
Or I mean I guess what I'mgetting at is, is it realistic
(13:57):
to possibly address some of thestumbling blocks to further
data data center developmentthere?
David Plotz (14:03):
It is, it is.
Because right now then we'relooking at these potential
geothermal and small hydro andpump storage situations, and
we're able to say, well, wedon't have a PPA, but we know we
can say with some confidencethat that the expenditures on
the studies and getting us downthe road will be filled if a
data center or a new, I don'tknow, an industrial plant
(14:25):
doesn't show up.
We have the backstop of Bitcoinlanding.
Because I've already hadinquiries from Bitcoin miners
after that article is published,say, hey, we're interested.
How far out are you?
And I tell them it's a number,you say, I say, okay, we'll be
back at your door again in threeor four years and we'll start
talking about interest and howwe can potentially put something
in.
So the the the certainty thatcomes from having Bitcoin mining
(14:47):
creates uh uh it's it's Iforget the virtuous circle here,
right?
Where you can start gettingfurther down the road and not
having to wait for the load toarrive.
Paul Ciampoli (14:56):
Okay.
Yeah, yeah, no.
And so for my final question,I wanted to give you the chance
to talk about the PUD'sdevelopment of its clean energy
implementation plan, which I Icame across uh as part of
preparing for this interview.
And as you know, that'srequired by the state's Clean
Energy Transformation Act.
So, you know, one of the thingsI'm interested in knowing about
(15:16):
is how is the PUD engaging withcustomers to get feedback from
them as a developments plan andas a develops plan and also kind
of just maybe provideadditional details on the plan
itself.
David Plotz (15:28):
Sure, sure.
Uh well, let's start with thesecond aspect.
So the plan itself, uh it putsWashington as is is attempting
to lead the climate policy as interms of its conversion to
carbon-free uh or carbonneutral, I should say,
electricity, uh by 2030, andthen 100% carbon-free
(15:48):
electricity by 2045.
It's a it's a strong push.
And I mean, depending on yourperspective, that that's a great
thing or a terrible thing.
The Clean Energy TransportationAct not only has the aspect of
what are we going to do to getcarbon-free, but it also
includes provisions for energyassistance to low-income
households that we're currentlyworking through.
(16:10):
So, for example, the LewisCounty PUD has um three
different methods that weacquire and provide funds to our
low-income households in thecounty.
Like I say, we're a bit ruraland we're below on average the
um the statewide income levels,and we do have a large amount of
unemployment here.
So it's a big deal to ourratepayers.
(16:32):
And we try to uh tap everypotential resource, both local,
state, and federal, to deliveradditional support.
But ours are primarily part ofit is through uh winterization.
We're we're a winter peakingutility.
So winterization and doing umthe insulation homes, we provide
free audits, we get out andinto our customers, and we work
(16:54):
really hard to help customerslower their electricity bills
directly, which is a benefit tothe PUD as well, obviously.
We also provide funding, bothinternal and customer donated
funding to our low-income andour low-income senior customers.
So we have about three plansthat help customers directly
with their utility bills.
(17:15):
There's a discussion at theWashington state level in the
Clean Energy Transformation Act,CEDA, we call it.
There's a discussion at theWashington state level to
centralize that.
And it's currently ongoing, butI don't know if that's going to
come to fruition.
But we don't, as Lewis CountyPUD operates, we've been doing
this for a number of years, uh,you know, for over 10 years, 15
(17:35):
years.
So we'll just keep going downthis path until something
changes at at the state level.
Now, the state level rules isgoing to change the way we
operate.
Now, what does that mean?
It means if we're going to be100% carbon-free electricity by
2045, right now we'reessentially 80% hydro from we're
(17:57):
we're a Bonneville.
It's a bit more because we'relarge enough to re to qualify
for qualified to be uh mandatinga renewable energy from the
what we call the I-937 uhinitiative, which requires a
percentage of our energy uh usein the district to be uh from
(18:18):
renewable resources, and hydrois not considered renewable
under that law.
So even if we're 80% hydro andwe're 10% nuclear and the rest
from wind and other, that'sstill not enough.
We end up having to sell someof our hydro energy in order to
purchase wind energy.
It's it's somewhat ridiculous,but that's just my view on it.
At the end of the day, we haveto comply, and CETA will likely
(18:42):
replace that because if you'regoing to be 100% carbon-free
electricity, the the rulesaround that will be probably uh
surplant the initial the I-937Act and her rules.
So our engagement withcustomers now, I'm getting uh
back to your first point, isthrough the ongoing both in-law
(19:05):
as well as what we would just dois we try to reach out to
customers.
We provide uh opportunities forpublic input both on our
website and in person at ourmeetings, and we we get out into
the public.
I try to go out and talk topeople at Granges around the
county and provide chances tocome talk to me directly uh on
(19:26):
regularly scheduled meetings.
Compliance with seed isimportant.
It's a law whether we agreewith it or not, and what we will
follow, we will comply.
But at the end of the day,eliminating coal by 2025 and
100% carbon-free electricity by2045, it's gonna have an impact.
It's already starting.
If you know much about thearea, I think the last coal
(19:48):
plant on the West Coast was inCentralia.
It's about five miles north ofuh PUD headquarters here.
That coal plant going away iswas a baseload for Seattle.
And Portland that's no longerthere at the end of this year.
And so replacement of thatgeneration is a challenge.
It's gonna be a challenge.
(20:08):
It will require betterplanning, it will require better
transmission.
It'll require a number ofthings for this region.
So it's gonna it, you know, itlike I said, depending who you
talk, there's opponents to CDand there's people who are all
for it.
But at the end of the day,we'll follow it.
But we have to plan well.
We have to get ahead of theissues by being more dynamic and
versatile in how we're going tofind generation and
(20:31):
transmission.
Boy I can talk all day on thisstuff.
Sorry.
Paul Ciampoli (20:34):
Yeah, yeah, no, that's that that's great
information.
And and I I would guess it goeswithout saying that as you talk
to the public, you're you'renoting that there's a lot of
balls in the air in terms ofmaking sure that, you know, as
public power does, focusing onaffordability and reliability,
but there's certain things thatare, you know, to some degree
out of your control, right?
That's exactly right.
David Plotz (20:55):
And you we'll we're gonna do as much as we can to
uh avoid this, but uh the thebiggest concern is that there
will be these rolling blackoutsthat will come, and that will
shock people into waking andsaying, hold on a second, why
are we eliminating generationbefore we have the replacement
energy or have certainty aboutthe replacement energy?
So uh we continue to ring thebell, but we can't just hope
(21:18):
people will kind of uh see that.
So we have to, like I say, getthe other balls in the air, get
the other generation moving,figure out ways to conserve,
figure out ways to get peoplebehind the ability to bring more
energy to this region.
If you've looked around theUnited States, you you'll see
that all these data centers andall these larger new loads are
(21:39):
showing up on the East Coast andTexas and some in the northern
Midwest, they don't show up outhere.
Uh yeah, we do have uh a numberof data centers around the
hydro projects on in easternWashington, and it makes sense
because we're right next to thegeneration, but that's about it.
And the growth there is ishappening, but it's not
happening at the scale that yousee in Virginia or Texas.
(22:01):
So if we want to grow or if wewant to have those jobs, we need
to be a lot more proactive andmore unified in the region.
I believe we are.
I think the movement ofBonneville to markets plus, the
ability to do a region-wideresource adequacy program are
all going to contribute to usworking more cohesively in the
West.
Paul Ciampoli (22:22):
All right, David.
Well, thanks again so much fortaking the time today to speak
with us.
It's been an interesting, veryinteresting conversation.
And we'd love to have you backperhaps as a guest at some point
next year, or we could talkabout the you know, the plan
that we just discussed, forexample, among other things.
David Plotz (22:35):
Great.
I'd love to.
My view on all this is we allthe more we talk about it, the
more we understand it, thebetter, smarter people than me
can come in and say, here's abetter way to do it.
So I appreciate the opportunityto talk.
Thanks, Paul.
Paul Ciampoli (22:48):
Thanks for listening to this episode of
Public Power Now, which isproduced by Julio Guerrero,
graphic and digital designer atAPPA.
I'm Paul Ciampoli, and we'll beback next week with more from
the world of public power.
Welcome to the latest episode of Public Power
Now.
I'm Paul Ciampoli, APPA's newsdirector.
Our guest on this episode isDavid Plotz, General Manager of
Washington State's Lewis CountyPUD.
David, thanks for joining us.
Hey, Paul, thanks for invitingme.
Sure thing.
So David, just to get ourconversation started, I want to
give you the opportunity toprovide an overview of the PUD
in terms of things like itshistory, number of customers
(00:30):
served, and current generationmix.
I'd be happy to.
David Plotz (00:33):
So Lewis County PUD, founded in 1936, part of
the initiative number one ofWashington State.
We're about 35,000 customers,the meters out there, and we
have about 3,000 miles ofelectrical line out. We're a
pretty wide county.
We cover essentially the countyplus a little bit more. The
(00:55):
only part of the county we don'tcover is the city of Centralia.
They have their own municipallighting system there.
So we're a bit of a semi-ruralcounty, if you will. We're
about 95 miles wide east-westand 25 miles north-south
approximately.
We have a lot of trees and alot of long spans.
So, in that sense, we're notvery dense population-wise.
(01:17):
We're a Bonneville customer.
We've been slice block sliceproducts for the past decade
and a half.
And we're going to switch, wejust made the election to switch
to Bonneville's provider ofchoice contract, the blockless
shaping.
So, why we do that is we havesome generation inside of our
territory.
We have Caleb's Falls HydroProject.
(01:39):
And since we're essentially alarge, small utility or a small,
large utility, depending howyou measure it.
Because of that, we want totake a little bit more control
of our future state, bymanaging our own needs and
generation builds.
It's kind of I was looking atsome of the APPA statistics, and
(02:00):
if you look at the largest,hundred largest public power
utilities by electric customersserved in 2023, we're number 97.
So I wear that with pride.
I think it's it's good.
We're not that small anymore.
And we we have to take a lotmore control of our of our
destiny.
And our commissioners are allbehind that.
There we're doing a fewprojects, not only that for
(02:22):
renewable requirements such aswind, but we're exploring other
small hydro pump storage andgeothermal inside of the
district.
Paul Ciampoli (02:30):
Just real quick, just out of curiosity, any
elaboration you could do interms of the things that you
just said you were looking at interms of possible timing on
that?
David Plotz (02:38):
Sure.
And actually it's gonna be partof the conversation today, too.
I think I don't want to go toomuch into detail because we
we're really at the beginning.
Yeah, that's fine.
Um, but small hydro, we'rewe're we we abut the Cascade
Mountains.
And so because of that, there'sa number of small hydro
opportunities that haven't beentapped.
Pump storage as well.
(02:58):
Uh as it becomes moreeconomical, uh given the value
of energy, um, we we're lookinginto a couple of different
potential areas.
Geothermal probably has thebiggest flash in any media.
We're in the well down thefirst stages of investigation.
We haven't drilled any holesyet, but we're doing a number
of different studies inconjunction with uh PNL Pacific
(03:20):
Northwest National Labs uh andhave received grant funding for
that.
And I should also mention thisis just an aside, we're also in
the broadband space.
We do get about $50 million ofgrants, both state and federal,
to roll out broadband, fiberoptic broadband to the rural
communities and rural peoplehere in Lewis County.
(03:41):
So back to the generation,those projects are probably the
earliest seven years out.
So it's we're just at thebeginning stages.
Paul Ciampoli (03:50):
Gotcha.
Gotcha.
Okay, great.
So just switching gears here,David.
In a piece published over thesummer in the Northwest Public
Power Association's BulletinMagazine, you make the case that
partnering with Bitcoin miningcompanies as a form of data
center load can enhance autility's appeal by enabling
lower rates and reinforcing gridinfrastructure.
And a note for our listeners,along with his role at PUD,
(04:11):
David is founder and CEO of L EG R L E G L E J R, L L C and
Modulo LLC.
LEGR provides Bitcoin andfinancial tax auditing services
while Modulo specializes inphysical Bitcoin security
solutions.
So against that backdrop,could you provide for our
listeners additional details onthe potential benefits that can
(04:31):
flow from utilities partneringwith Bitcoin mining companies as
a form of data center load?
Sure.
David Plotz (04:37):
There's a lot to unpack here.
So I before I get too far, andI, you know, I want to be able
to explain it clearly for yourlisteners, but to understand
what I'm talking about, onereally has to understand the
concept of how Bitcoin operatesand how it's somewhat of a it
changes the paradigm for energyuse.
So I'll try not to be toobasic, but put simply is that
(05:00):
Bitcoin as a fine a newfinancial instrument and a new
product that the world hascreated is a is an energy
intensive, but at the same time,energy valuable use case for
utilities.
So what do I mean by that?
Utilities up to now had towe've been good.
We've been essentiallyfollowing load, building as as
(05:21):
need arose, when and we'republic power, so we're at cost,
and we're working hard to keepyou know safe, reliable,
low-cost electricity for ourratepayers.
And that's that still goestoday.
When Bitcoin showed up on thescene, it was a bit of a Wild
West, as I said in my magazinearticle.
But what has evolved out ofBitcoin for the past 15, 16, 17
(05:42):
years is uh people are realizingthat it has consistency of
value.
And that consistency of valueexists uh and not in the price
per the exchange rate to priceof other currencies, but the
consistency of how it works.
It just continues to operate ina in a method that's
predictable and understandable.
So Bitcoin miners tend to bealso called data centers.
(06:06):
And as everyone um who islistening probably understands,
data centers are coming.
And data centers providevarious different benefits.
There's data centers thatprovide your cloud storage,
there's data centers thatprovide Bitcoin mining, there's
data centers that do AI languagelearning and training models.
And those are the bigcategories, there's probably
more out there that I'm leavingout.
(06:28):
But Bitcoin mining holds a kindof a special spot in all of
that.
Because what is Bitcoin mining?
Bitcoin mining, when I explainto people, it's essentially the
accounting function of Bitcoin.
Now I'm a CPA and a CFA, so Itend to see things through these
lenses.
But all mining is doing is it'sproviding the accounting of
(06:49):
transactions of the globaltransaction of Bitcoin.
That's all mining does.
There's extra pieces to it,like the rewards aspect and how
the calculation is done, but allminers are doing is they're
trying to compete to make thenext journal entries on onto the
Bitcoin blockchain and berewarded for that.
Why that matters for utilitiesis because before this time, all
(07:11):
that accounting and thefinancial aspects are all being
done by banks, by various firmsin the world.
And that's fine.
It's but what Bitcoin broughtto the table was saying, hey,
anybody can do it.
Anybody can get involved.
And so businesses have sprungup around the country and around
the world that specificallyoperate as Bitcoin mining
(07:32):
companies.
And that's good for them.
We're a public utility, wedon't get into Bitcoin mining.
And I to make it clear for you,Paul and your listeners, I'm
not advocating right now, atleast, I'm not advocating for
public utilities to go out andstart mining.
That's a different businessmodel, and we're not in that.
And I don't want to be in that.
I leave it to the specialistsfor this Bitcoin mining.
What I'm saying is let's let'spartner up, let's figure out how
(07:54):
we can both benefit from thisenergy-intensive business.
So I outlined in my articlesome of these benefits, and and
I boiled it down to essentiallythree different things.
Um, you build ahead of growth.
And what does that mean?
It means you build newgeneration uh with anticipation
that these miners will show upand start mining with that new
(08:17):
generation.
So you don't have to try topredict your growth inside your
utility.
What you can say is if I buildthis, I can get ahead of it and
do power contracts with uhBitcoin miners for certain
periods of time, whether it'seight years or 16 years or
whatever it is, to take thatofftake.
And then when your other loadshows up after those points of
time, you can then have thatpower readily available for
(08:39):
those newly arriving loads.
And embedded in that is asubsidization aspect.
So up to now through history,we've built new projects, we
built dams, we built uh youknow, hydro projects, we built
uh gas, coal, whatever they maybe, with the idea that the load
will arrive.
But until that load arrives,existing ratepayers subsidize
(09:00):
that newly constructed project.
It's it's it's common, andideally, you don't build it too
far ahead that you go, youbankrupt your ratepayers.
So very good planning wasalways necessary, and it still
is today.
But the idea that you canpredict predictably bring in
Bitcoin mining right at thepoint of energization means
(09:21):
there's no morecross-subsidization.
In fact, it makes it even moreclear that you can say
historical preference raise offthe federal system can be
reserved for these types ofcustomers and for the newly
arriving loads, Bitcoin miningloads, you can be very specific
that these new projects are nowbeing used to deliver the energy
to them.
So that's the first point.
Second point is the concept ofdemand management.
(09:43):
As we move into a moreconnected and technologically
complex grid, demand managementis uh becoming more and more a
larger aspect of deliveringadditional capacity to existing
load and/or newly arriving load.
So uh shaving peaks, storingenergy over time, all those
aspects of demand management uhare important.
(10:06):
And Bitcoin miners can come inand also do the same thing.
And this has already been showndown in that ERCOT and over in
PJM, where miners have uhessentially contracted with the
uh system operators to curtailwhen demand is peaking, when
loads are high, or when pricesare high.
And the unique thing aboutBitcoin miners is they can shut
(10:27):
up very quickly.
Now, given cloud storage canprobably shut off just about as
quickly, but you don't want asituation where you cannot
access your files.
Uh, whereas Bitcoin miners, therelationship between being on
and being off uh is veryeconomical.
There's no kind of ongoingcarry costs when you shut down.
Your primary driver of yourcosts is your electricity bill.
(10:48):
So the moment you curtail as aBitcoin miner, your costs go
down significantly.
I won't say going to zero, butgoing near zero.
So that demand managementaspect is a second important
concept that utilities andBitcoin miners can uh both
benefit from.
And the third, and I think thisis the most important, most
related, Paul, to uh what we'redoing here in Lewis County is
(11:12):
we're looking at assets,generation, potential generation
locations around the county.
Great.
And if those are right neartransmission lines, even better.
But if they're not, then I needto start thinking do I want to
build transmission lines up intothe mountains that will be for
small hydro and may or may noteconomically pencil out?
And that has to be decidedearly on. Whereas if you have a
(11:35):
Bitcoin mining partner orcompany or companies, it doesn't
have to be just one, who aresaying, okay, for a short decade
or a decade and a half, we'rewilling to put our miners right
next to that hydro project up inthe mountains.
You don't need to build thetransmission line because what
they're doing is they'reconverting that energy generated
to Bitcoin and then convertingit to dollars for our utility.
(11:58):
And we use those dollars thento lower the overall rates for
the district.
So the idea there is we're nowusing Bitcoin and Bitcoin mining
to I don't want to saysubsidize, but essentially cap
the value that already existsinside the district's borders
for the benefit of the ratepayer.
Paul Ciampoli (12:17):
And in terms of of data centers, any elaboration
in terms of uh proposals in theservice territory for the PED?
You know, we have.
David Plotz (12:27):
And I can't get into it too much detail, but I
can tell you at a high level,we've been we've got a number of
inquiries over the past coupleof years.
I've only been in the feed forthree years, going on to the
fourth year now.
And over that time, we've had anumber of inquiries.
Our number one problem, though,is that these data centers want
a gigawatt and they won ityesterday.
Okay, well, we're we don't havea gigawatt of spare capacity
(12:48):
for sure.
Our utility only operatesaround 125 average megawatts.
So transmission's a big issue.
But if you've followed anythingaround Washington State or in
the Pacific Northwest,transmission's a big issue.
We essentially have a lot ofcongestion.
We're right on the I-5 corridorbetween Seattle and Portland,
and transmission new builds tothis area is a difficult thing.
(13:11):
So it takes time, and that timehas basically had people come,
look at the area, and thenleave.
Because even if we could getthe energy, getting in here is
the harder part.
So we've we've had a fewinquiries from smaller sized
data centers, but again, uh theyjust they tend not to move too
fast uh or they want to movefaster than what we can do
(13:33):
within this location.
Paul Ciampoli (13:35):
And I guess in terms of the kind of going
forward, uh on on the one hand,you you you you have the luxury
of kind of putting furtherthought into the idea of if if
another company comes at somepoint in the future, you may
have uh a better sense as to thepracticality of a proposal.
Or I mean I guess what I'mgetting at is, is it realistic
(13:57):
to possibly address some of thestumbling blocks to further
data data center developmentthere?
David Plotz (14:03):
It is, it is.
Because right now then we'relooking at these potential
geothermal and small hydro andpump storage situations, and
we're able to say, well, wedon't have a PPA, but we know we
can say with some confidencethat that the expenditures on
the studies and getting us downthe road will be filled if a
data center or a new, I don'tknow, an industrial plant
(14:25):
doesn't show up.
We have the backstop of Bitcoinlanding.
Because I've already hadinquiries from Bitcoin miners
after that article is published,say, hey, we're interested.
How far out are you?
And I tell them it's a number,you say, I say, okay, we'll be
back at your door again in threeor four years and we'll start
talking about interest and howwe can potentially put something
in.
So the the the certainty thatcomes from having Bitcoin mining
(14:47):
creates uh uh it's it's Iforget the virtuous circle here,
right?
Where you can start gettingfurther down the road and not
having to wait for the load toarrive.
Paul Ciampoli (14:56):
Okay.
Yeah, yeah, no.
And so for my final question,I wanted to give you the chance
to talk about the PUD'sdevelopment of its clean energy
implementation plan, which I Icame across uh as part of
preparing for this interview.
And as you know, that'srequired by the state's Clean
Energy Transformation Act.
So, you know, one of the thingsI'm interested in knowing about
(15:16):
is how is the PUD engaging withcustomers to get feedback from
them as a developments plan andas a develops plan and also kind
of just maybe provideadditional details on the plan
itself.
David Plotz (15:28):
Sure, sure.
Uh well, let's start with thesecond aspect.
So the plan itself, uh it putsWashington as is is attempting
to lead the climate policy as interms of its conversion to
carbon-free uh or carbonneutral, I should say,
electricity, uh by 2030, andthen 100% carbon-free
(15:48):
electricity by 2045.
It's a it's a strong push.
And I mean, depending on yourperspective, that that's a great
thing or a terrible thing.
The Clean Energy TransportationAct not only has the aspect of
what are we going to do to getcarbon-free, but it also
includes provisions for energyassistance to low-income
households that we're currentlyworking through.
(16:10):
So, for example, the LewisCounty PUD has um three
different methods that weacquire and provide funds to our
low-income households in thecounty.
Like I say, we're a bit ruraland we're below on average the
um the statewide income levels,and we do have a large amount of
unemployment here.
So it's a big deal to ourratepayers.
(16:32):
And we try to uh tap everypotential resource, both local,
state, and federal, to deliveradditional support.
But ours are primarily part ofit is through uh winterization.
We're we're a winter peakingutility.
So winterization and doing umthe insulation homes, we provide
free audits, we get out andinto our customers, and we work
(16:54):
really hard to help customerslower their electricity bills
directly, which is a benefit tothe PUD as well, obviously.
We also provide funding, bothinternal and customer donated
funding to our low-income andour low-income senior customers.
So we have about three plansthat help customers directly
with their utility bills.
(17:15):
There's a discussion at theWashington state level in the
Clean Energy Transformation Act,CEDA, we call it.
There's a discussion at theWashington state level to
centralize that.
And it's currently ongoing, butI don't know if that's going to
come to fruition.
But we don't, as Lewis CountyPUD operates, we've been doing
this for a number of years, uh,you know, for over 10 years, 15
(17:35):
years.
So we'll just keep going downthis path until something
changes at at the state level.
Now, the state level rules isgoing to change the way we
operate.
Now, what does that mean?
It means if we're going to be100% carbon-free electricity by
2045, right now we'reessentially 80% hydro from we're
(17:57):
we're a Bonneville.
It's a bit more because we'relarge enough to re to qualify
for qualified to be uh mandatinga renewable energy from the
what we call the I-937 uhinitiative, which requires a
percentage of our energy uh usein the district to be uh from
(18:18):
renewable resources, and hydrois not considered renewable
under that law.
So even if we're 80% hydro andwe're 10% nuclear and the rest
from wind and other, that'sstill not enough.
We end up having to sell someof our hydro energy in order to
purchase wind energy.
It's it's somewhat ridiculous,but that's just my view on it.
At the end of the day, we haveto comply, and CETA will likely
(18:42):
replace that because if you'regoing to be 100% carbon-free
electricity, the the rulesaround that will be probably uh
surplant the initial the I-937Act and her rules.
So our engagement withcustomers now, I'm getting uh
back to your first point, isthrough the ongoing both in-law
(19:05):
as well as what we would just dois we try to reach out to
customers.
We provide uh opportunities forpublic input both on our
website and in person at ourmeetings, and we we get out into
the public.
I try to go out and talk topeople at Granges around the
county and provide chances tocome talk to me directly uh on
(19:26):
regularly scheduled meetings.
Compliance with seed isimportant.
It's a law whether we agreewith it or not, and what we will
follow, we will comply.
But at the end of the day,eliminating coal by 2025 and
100% carbon-free electricity by2045, it's gonna have an impact.
It's already starting.
If you know much about thearea, I think the last coal
(19:48):
plant on the West Coast was inCentralia.
It's about five miles north ofuh PUD headquarters here.
That coal plant going away iswas a baseload for Seattle.
And Portland that's no longerthere at the end of this year.
And so replacement of thatgeneration is a challenge.
It's gonna be a challenge.
(20:08):
It will require betterplanning, it will require better
transmission.
It'll require a number ofthings for this region.
So it's gonna it, you know, itlike I said, depending who you
talk, there's opponents to CDand there's people who are all
for it.
But at the end of the day,we'll follow it.
But we have to plan well.
We have to get ahead of theissues by being more dynamic and
versatile in how we're going tofind generation and
(20:31):
transmission.
Boy I can talk all day on thisstuff.
Sorry.
Paul Ciampoli (20:34):
Yeah, yeah, no, that's that that's great
information.
And and I I would guess it goeswithout saying that as you talk
to the public, you're you'renoting that there's a lot of
balls in the air in terms ofmaking sure that, you know, as
public power does, focusing onaffordability and reliability,
but there's certain things thatare, you know, to some degree
out of your control, right?
That's exactly right.
David Plotz (20:55):
And you we'll we're gonna do as much as we can to
uh avoid this, but uh the thebiggest concern is that there
will be these rolling blackoutsthat will come, and that will
shock people into waking andsaying, hold on a second, why
are we eliminating generationbefore we have the replacement
energy or have certainty aboutthe replacement energy?
So uh we continue to ring thebell, but we can't just hope
(21:18):
people will kind of uh see that.
So we have to, like I say, getthe other balls in the air, get
the other generation moving,figure out ways to conserve,
figure out ways to get peoplebehind the ability to bring more
energy to this region.
If you've looked around theUnited States, you you'll see
that all these data centers andall these larger new loads are
(21:39):
showing up on the East Coast andTexas and some in the northern
Midwest, they don't show up outhere.
Uh yeah, we do have uh a numberof data centers around the
hydro projects on in easternWashington, and it makes sense
because we're right next to thegeneration, but that's about it.
And the growth there is ishappening, but it's not
happening at the scale that yousee in Virginia or Texas.
(22:01):
So if we want to grow or if wewant to have those jobs, we need
to be a lot more proactive andmore unified in the region.
I believe we are.
I think the movement ofBonneville to markets plus, the
ability to do a region-wideresource adequacy program are
all going to contribute to usworking more cohesively in the
West.
Paul Ciampoli (22:22):
All right, David.
Well, thanks again so much fortaking the time today to speak
with us.
It's been an interesting, veryinteresting conversation.
And we'd love to have you backperhaps as a guest at some point
next year, or we could talkabout the you know, the plan
that we just discussed, forexample, among other things.
David Plotz (22:35):
Great.
I'd love to.
My view on all this is we allthe more we talk about it, the
more we understand it, thebetter, smarter people than me
can come in and say, here's abetter way to do it.
So I appreciate the opportunityto talk.
Thanks, Paul.
Paul Ciampoli (22:48):
Thanks for listening to this episode of
Public Power Now, which isproduced by Julio Guerrero,
graphic and digital designer atAPPA.
I'm Paul Ciampoli, and we'll beback next week with more from
the world of public power.
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