Mining company Stronghold fined $1.4 million for violating electricity market rules to mine Bitcoin

CoinRank News: Miner Stronghold Digital has agreed to pay more than $1.4 million in fines and refunds after a federal investigation found that it had violated energy market rules while prioritizing its bitcoin mining operations. Stronghold Digital and its subsidiary Scrubgrass Reclamation Company operated the 85-megawatt Scrubgrass Power Plant in northwestern Pennsylvania as a capacity resource in the PJM Interconnection energy market from 2018 to 2022. Under a settlement agreement released by the Federal Energy Regulatory Commission (FERC) on January 30, Stronghold was contractually obligated to provide its available power to the PJM grid to help ensure grid reliability. However, the FERC Office of Enforcement determined that Stronghold failed to meet this obligation between June 2021 and May 2022, instead diverting power to its bitcoin mining operations. According to FERCs investigation, Scrubgrass underreported its available power capacity to be offered in the market by 67% of day-ahead power and 69% of real-time power. It diverted electricity to bitcoin mining instead of providing it to PJM, accounting for 57% of day-ahead power and 59% of real-time power. In addition, FERC noted in the settlement order that Stronghold purchased electricity from PJM at wholesale prices 24% of the time, and some of that electricity was misclassified as station power instead of being used for necessary power plant operations. As part of the settlement, Stronghold and Scrubgrass will repay $678,635 in improper revenue to PJM and pay a civil penalty of $741,365 to the U.S. Treasury. The company must also submit compliance reports for at least two years and provide employee training on market rules.