North Tonawanda poised to ban new crypto mining facilities

During a meeting Tuesday evening, the city’s Common Council read a resolution to ban new, or the expansion of existing, “data centers” for the next two years. 

Those data centers can include “facilities housing multiple banks of computers within a building, modular facilities containing processors in multiple storage-like containers, server clusters … and other operations related to cryptocurrency mining, blockchain authenticating, Artificial Intelligence (A.I.) processing, general data computing, processing and storage, and other large-scale electronic-based centers of the like,” according to the resolution.

If the two-year moratorium is approved, the city expects to update its zoning codes and ordinances to address high noise levels and greenhouse gas emissions, particularly from Digihost, the cryptocurrency mining company that acquired the Fortistar gas power plant off Erie Avenue to run its operations. 

Since it began operations in February 2022, Digihost has reportedly created noise pollution likely from fans used to cool down bitcoin-mining computers in buildings on its property. The resulting noise reverberates around nearby neighborhoods and frustrates residents.

Additionally, Digihost has, while operating on an expired air permit, produced more carbon dioxide emissions in the first three months of 2024 than it had in any year prior, according to data from the U.S. Environmental Protection Agency’s Clean Air Markets Program.

The North Tonawanda Common Council plans to vote on the two-year moratorium during its meeting on July 16.

During a rally before the Tuesday evening meeting, residents advocated for the moratorium and said it would help protect their health.

“The noise levels have been so disruptive, it kicks me out of my own backyard,” said Mark Polito during the rally. “We’re asking our Common Council, please do the right thing this time around – get this place to stop eventually no more noise, no more (greenhouse) gases. And give us a nice, clean environment that we can call home again.”

Deb Gondek, a North Tonawanda resident who has advocated against Digihost since its inception, said the two-year moratorium won’t stop the current issues with the facility, but “it will stop it from getting worse.”

In a meeting on July 2, the North Tonawanda Common Council voted to hire an outside expert to conduct noise readings around the Digihost facility. The “legally enforceable” readings would determine whether the facility is violating the city’s existing noise ordinance, according to the July 2 resolution.

The chosen expert, Les Blomberg of the Noise Pollution Clearinghouse, will also train the North Tonawanda Police Department on how to properly use equipment that is necessary to enforce its noise ordinance. The city will transfer $10,000 from its general fund to the police department for the training, new equipment purchase and contract with Blomberg.

The move by the city came a few weeks after a report by The Buffalo News that cited Blomberg,  who suggested the city update its noise ordinance and buy proper equipment to enforce its noise ordinance.

During the July 2 meeting, residents were unhappy the city was footing the bill for looking into the noise issues. Instead, they wanted Digihost to pay since it was the company creating the noise issues.

However, city officials shot down that idea during the July 2 meeting and reiterated it during the Tuesday evening meeting.

“We’re on the hook to do the noise readings, the city is, to see if they currently follow our ordinances,” said Council President Frank DiBernando during Tuesday’s meeting. “They (Digihost) can give reimbursements down the road or they can’t. It’s up to them. Right now, we fund it ourselves.”

DiBernardo and North Tonawanda Mayor Austin Tylec added that Digihost is working on mitigation measures to possibly reduce the noise coming from the Erie Avenue facility.

Those mitigation measures are reportedly to build a new acoustics dampening wall on the property and swap to more efficient equipment, Tylec said.

Beyond the noise issues, Gondek said she worries about the pollution issues stemming from the Digihost facility. 

The Title V air permit issued by the state Department of Environmental Conservation for Fortistar passed its expiration date in November 2021. Digihost acquired Fortistar in September 2022 – a move that is now being challenged in court.

Most Title V permits in New York, administered under the federal Clean Air Act for major polluters, are outdated. In Western New York, 87% of major polluters had expired Title V air permits, according to data from the DEC.

Reporting by The News found that after some facilities’ Title V permits’ expiration dates passed, their emissions skyrocketed, including Fortistar.

From January through March of this year, Fortistar emitted more than 53,000 tons of the greenhouse gas carbon dioxide, according to data from the EPA’s Clean Air Markets Program.

That’s a massive uptick from years prior as the most carbon dioxide Fortistar had ever reportedly produced over the course of an entire year was 44,000 tons, the data show.

The DEC is reportedly reviewing the renewal of Fortistar’s Title V permit.

“It is our position that Fortistar’s air permit shouldn’t be renewed at all since it’s for an entirely new use: bitcoin mining by Digihost which has significantly increased emissions,” Gondek said before the Tuesday council meeting.

Tylec said that the city is hoping the DEC will address the outdated Title V permit soon.

“This is really when it comes down to the DEC and taking their Title V clean air permits seriously,” he said after Tuesday’s meeting.