Bitcoin mining operations in Chelan County will start paying more money than all other customers for the electricity they use beginning July 1.

The County PUD Commissioners recently approved the move that gradually increases their energy costs by about 29 percent over several years.

Malichi Salcido is the predominant bitcoin mining operator in Chelan County, and he says his rates have already been raised by a much larger amount.

"The monthly invoices we we're paying went up substantially, 75%-80%, " said Salcido. "We actually went from making a slight profit to losing a substantial amount of money, year-to-date."

Salcido says the increase for his operations began in January, while the PUD announced a series of delays before it settled on July 1.

PUD Commissioners initially agreed to adopt the higher rate for crypto-currency customers back in 2018.

Salcido is one of three bitcoin operators on Chelan County, but his plants use the lion's share of the energy among them.

The total usage of bitcoin mining operations in the county in 7.5 megawatts, with Salcido's plants accounting for 6 megawatts for than sum.

The county's entire output of energy to serve all customers, according to Salcido, is about 200 megawatts.

Salcido also has bitcoin mining operations in Douglas and Grant counties.

He says the high cost of conducting a bitcoin business in Chelan County led him to change his business model.

"We are taking crypto currency servers out of our location and replacing them with data processing servers," Salcido said. "AI, Deep Learning, Machine Learning, processing servers that are not necessarily running crypto."

Salcido's plants in Grant and Douglas counties are still being used for bitcoin mining because the currency has not been singled out to pay higher energy costs in those places.

He says he's not pulling up shop in Chelan County because of the price hike, and is taking a long term approach to see if negotiations with the PUD over time will lead to an agreement that works for both the utility and bitcoin operations.

Salcido says he does think the PUD has a legitimate reason to be concerned with high load operations such as his, that the PUD needs to protect against new technologies or load applicants threatening to suck up the energy it now sends to the open market, and where profit levels are high.

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