Polson data center still in preliminary discussion
POLSON — Despite numerous press reports announcing future plans to build a 50-megawatt data center in Polson, it’s clear that the project is in very preliminary stages.
The announcement came June 3 during the Montana “On The Rise” Economic Summit, cohosted by Sen. Steve Daines and the Montana Chamber Foundation. A press release from Gov. Greg Gianforte’s office touted an investment to build the center in concert with Canadian entrepreneur and investor Kevin O’Leary (of “Shark Tank” fame), Bitzero CEO Akbar Shamji, and the Confederated Salish and Kootenai Tribes, represented at the conference by Tribal Secretary Martin Charlo.
If built, the center could provide the computing muscle required by bitcoin miners, who use supercomputers to solve complex equations, as well as other web-based businesses.
The announcement and subsequent press coverage have raised ample speculation about the center, which would reportedly utilize renewable power generated by Séliš Ksanka QÍispé Dam, managed by the tribal for-profit business, Energy Keepers, on behalf of CSKT.
However, it’s not a done deal, cautions Energy Keepers CEO Brian Lipscomb. “We have no agreement to sell these guys – or any other bitcoin miner – electricity,” he said in an interview last week. “We have conversations with bitcoin mining entities pretty regularly – always inquiring whether we have the electricity or if there’s an opportunity to buy electricity from us.”
“We’re in the wholesale electricity business, so we visit with them about potential deals,” he added. “But none of them has resulted in agreements for quite some time.”
Energy Keepers did sell electricity to Hyperblock, a bitcoin operation located in a warehouse in Bonner that went out of business in 2020. Lipscomb noted that when Hyperblock filed for bankruptcy “they quit paying their bills and we had to go into collection procedures.”
According to a recent story in the Missoulian, the facility was the focus of community concerns about noise and energy consumption that led Missoula County Commissioners to adopt zoning regulations stipulating where such operations can exist and requiring that they purchase or build new sources of renewable energy to offset the energy they use.
Bitcoin operations and the massive data centers that are required to support them are increasingly controversial due largely to the same issues that came to light in Missoula County: noise from fans used to cool the supercomputers and excessive energy consumption. At peak production, the Bonner facility reportedly used enough electricity to fuel about one-third of the homes in the county.
Although they purchased much of that power from a renewable source – SKQ Dam – naysayers worried that by using such a big chunk of renewables, the company was forcing other energy users to continue relying on coal-fired power plants, a significant contributor to carbon emissions.
Bitzero Blockchain Inc., the Canadian company negotiating with the Tribes, announced plans this spring to make North Dakota its U.S. headquarters. The company’s proposals to build data centers on the Flathead Reservation and on the Mandan, Hidatsa and Arikara Reservation in North Dakota include channeling heat exuded by the data processing operation into greenhouses designed to raise food year around.
That aspect of the plan intrigues Lipscomb. “It’s an interesting business model,” he said. “Obviously food sovereignty and sustainable food production is an aspiration of CSKT.”
Lipscomb notes that any large consumer of electricity would have to make arrangements with a transmission provider such as Bonneville Power or Northwestern Energy. At that point, independent power producers such as Energy Keepers could bid to supply them with wholesale power.
“That’s what we do – we’d make a deal based on how much power we’re generating here and how much we could get from the open market to supply the contract they want,” he explains.
SKQ dam produces around 1.1 million megawatts of electricity annually, with a peak monthly capacity of around 208 megawatts. Locally, Energy Keepers has agreements in place to supply a 7.5-megawatt block of electricity to Mission Valley Power year around and nearly 3.5 megawatts during the irrigation season.
Shane Morigeau, the public information officer for the Tribes, notes that that tribal government has no specific information yet on where the data processing center might be located or how many people it might employ.
“We are doing our due diligence and evaluation to see if this is a viable business opportunity,” he said.
“That said, the potential for local data-center capacity and heat recapture that can be used to support greenhouses and help achieve the Tribes’ priority on food sovereignty could provide immeasurable benefits not only for CSKT, but our community as a whole, including jobs and hi-tech business development opportunities for local folks and local small businesses.”
Morigeau emphasizes that Bitzero is proposing to build a data center on the reservation. “I think folks have been putting their personal emphasis on ‘bitcoin’ operations, when it’s been clear that the release (from the Governor’s office) was heavily focused on data centers – which everyone essentially needs and utilizes nowadays.”
The Tribes also appreciate the opportunity to explore a new business venture. “We value our relationship with our elected officials and are always glad to have them make new introductions, to be able to kick the tires on new opportunities and evaluate potential business partners interested in investing on our Reservation and in our state.”