STARKVILLE – A cryptocurrency mining center is in early development on Industrial Park Road.
The facility, a type of specialized data center, would become Starkville Utilities’ second-largest electrical customer behind Mississippi State University if it comes to fruition, drawing as much as 30 megawatts of power daily, Starkville Utilities Director Edward Kemp told The Dispatch following a board of aldermen work session Friday at City Hall.
Cryptocurrency is a digital currency that operates independently of government-backed financial systems. It is stored in digital wallets and fluctuates in value.
Mining facilities, like the one proposed in Starkville, use specialized computers that draw large energy loads to secure the digital transactions that take place.
Tennessee Municipal Electric Power Association, a membership organization representing all 60 municipal electric power providers in Tennessee, has assisted site developers to bring similar centers to counties across Tennessee.
Executive Director Brian Solsbee said TMEPA is working with a site developer, which he declined to name, to identify sites outside of Tennessee with the infrastructure capacity to handle a mining facility, leading the organization to Starkville Utilities.
Solsbee said the facility proposed for Starkville is far smaller than “hyperscale data centers” that store and process massive amounts of data for companies Google, xAI or Facebook.
“These large hyperscale (centers) would be like five to 10-fold, and maybe even 20-plus-times larger than what this site would be here in Starkville, with regards to power consumption,” Solsbee said during the work session.
Also unlike hyper-scale data centers, the mining facility would not seek to generate its own power, Solsbee said.
“This would be a customer buying through Starkville Utilities, whose buying through (Tennessee Valley Authority) on TVA’s balanced portfolio,” he said. “… It’s just much smaller in size than some of these that you’re seeing in the news, and being smaller, it has less lighting and noise issues to be concerned about.”
Kemp said early site and system capacity studies have been underway at Starkville Utilities to determine the project’s feasibility.
A system analysis of the Southwest Substation on Azalea Lane, which would serve the proposed site off Industrial Park Road, only uses about five megawatts, leaving capacity for up to 50 megawatts of power load.
“With the added load, it’s still only 50% loaded … even factoring in the additional 30-megawatt load, and also factoring in … 10-year growth, so (there is) lots of capacity,” Jeff Atwell, co-owner of Starkville-based engineering consultant firm Atwell and Gent, told the board during the work session.
Still, the project has a ways to go before it comes to fruition. Mayor Lynn Spruill said Friday’s work session presentation served only as an initial discussion, as the project still has to go before the city’s Development Review Committee.
Spruill said the presentation of the project at Friday’s meeting served only as an initial discussion as it still has to go before the city’s Development Review Committee.
“At this point in time, they’ve still got to go through the process of looking at the zoning and seeing if (the data center is) appropriate,” Spruill told The Dispatch.
Once discussions regarding zoning requests or potential special exceptions for zoning ordinances are brought forward, there will be public hearings scheduled during regular board meetings, Spruill said.
On the grid
Along with drawing electricity, Kemp said the project site – planned for roughly half of a 7-acre plot off Industrial Park Road – would also use up to 20,000 gallons of water a day to cool its specialty computers.
That usage would only take up roughly less than 0.1% of Starkville Utilities’ capacity, Kemp said.
“We’ve estimated the amount of water usage based on similar projects in other locations,” Kemp said. “The water is primarily used for cooling, and they have a recirculation system, so it’s basically make-up water for their chillers in the hot seasons. … A typical irrigation system for a large property, like even residential, could use 20,000 gallons a day.”
Ward 1 Alderwoman Kim Moreland asked if those estimates could eventually put a strain on the utility’s overall system or impact residential customers in the area.
“If something goes sideways and say we do end up going this route, is there a way that we can put a clause in (an agreement), for instance, that if something failed on (TVA’s) end, we could shut power off to that data center (and instead) supply customers and residents of Starkville?” Moreland said during the meeting.
Kemp said site developers would enter into a tri-party agreement with TVA and the city to curb electrical usage during higher output times for TVA, like in the summer, to help mitigate potential issues with residents’ electrical access.
There would also be a second tri-party agreement for the site developers to fund approximately $800,000 of transmission lines from the substation to the site, and three separate power usage agreements with Starkville Utilities, one for each 10 projected megawatts of usage.
“(Those three agreements are) the agreement that we will serve the load,” Kemp said. “TVA requires industrial power contracts for loads over a certain threshold.”
With the project only in early stages, Solsbee could not provide a projected cost for the facility.
If the facility comes to fruition, Spruill said the new tax revenue it would bring the city could help offset costs of infrastructure improvements for Starkville Utilities.
“The revenue that we get from the business is such that we would not necessarily have to do a rate increase to cover some of our capital costs because our electric department right now is in need of making improvements,” Spruill told The Dispatch. “And so if this would offset some of the costs of those improvements by providing a revenue source to the electric department, then it benefits our ratepayers, because their rates would not go up to cover those capital expenditures.”
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