NY appellate court greenlights challenge of crypto-mining power plant

(CN) — A New York appellate court on Thursday reversed the dismissal of a case brought by a pair of environmental groups challenging state-approved plans to turn an upstate gas-fired power plant into a crypto mine.

Last year, the Sierra Club and the Clean Air Coalition of Western New York filed a lawsuit claiming that the project, which was approved by the New York Public Service Commission, would boost pollution in nearby neighborhoods.

They argued the approval violated New York’s sweeping 2019 climate law, the Climate Leadership and Community Protection Act (CLCPA), which set goals including zero-emissions electricity by 2040. The state’s approval of that plan greatly sets those targets back, the group claim.

But a state judge dismissed the suit, finding that the plaintiffs had not brought the case at the correct time to challenge the decision.

“We disagree,” wrote Justice Eddie McShan for the New York Supreme Court Appellate Division, Third Judicial Department, in a Thursday ruling.

In reversing the dismissal of the groups’ complaints, McShan ruled that the closeness of the plaintiffs to the prospective crypto mine means they do have standing to challenge the public service commission’s decision under the Climate Leadership and Community Protection Act. 

“As with other analogous proceedings that are premised upon environmental harm, petitioners must allege something more than generalized concerns,” McShan wrote. “Nevertheless, as articulated in the petition, by virtue of petitioners' members' proximity to the facilities, the proposed increase in use of those facilities will affect them differently than other members of the public, thus conferring standing under the specific facts of this case.”

The power plant is located in North Tonawanda, a small city nestled between Buffalo and Niagara Falls. According to the lawsuit, the plant typically only runs between 10 and 74 days a year during times where there is high demand for electricity.

But that was set to change after the New York Public Service Commission allowed Canadian crypto company Digihost to take over the plant. Clean Air and the Sierra Club claim that, as a crypto mine, the plant would be able to run 24/7, increasing its greenhouse gas emissions by up to 3,500%.

The commission was aware of potential legal challenges under the Climate Leadership and Community Protection Act when it approved Digihost’s bid to buy the plant in 2022. 

“While numerous commenters raise significant environmental concerns, including emissions impacts and compliance with the CLCPA, these matters are beyond the scope of the limited review undertaken in this proceeding,” the commission ruled when approving the crypto mine.

But environmentalists claim that the conservation law requires state agencies to conduct thorough environmental reviews when making these calls. 

Thursday’s appellate ruling doesn’t stop the plans in their tracks. It merely allows the plaintiffs to argue the potential climate act violations in court. Still, it’s a win for Clean Air, the Sierra Club and Earthjustice — the nonprofit environmental law group representing the plaintiffs in this action.

"As the appellate court made clear, people who live near polluting power plants have every right to challenge the decisions that impact their health, safety, and quality of life,” Earthjustice senior associate attorney Hillary Aidun said in a statement. “We look forward to proving that cryptocurrency miners can't get a free pass to pollute, and the Public Service Commission can't ignore the climate and environmental justice impacts of its decisions."

Joining McShan on the appellate panel were concurring Justices Molly Reynolds Fitzgerald, Sharon Aarons, John Egan Jr. and Elizabeth Garry.

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