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

Odaily News Stronghold Digital has agreed to pay more than $1.4 million in fines and rebates after a federal investigation found it violated energy market rules while prioritizing bitcoin mining.
Stronghold Digital and its subsidiary, Scrubgrass Reclamation Company, operate the 85-MW Scrubgrass Generating Station in northwestern Pennsylvania as a capacity resource in the PJM Interconnection energy market from 2018 to 2022.
Under a settlement agreement issued Jan. 30 by the U.S. Federal Energy Regulatory Commission (FERC), Stronghold is contractually obligated to provide its available power to the PJM grid to help ensure grid reliability.
However, FERC’s Office of Enforcement determined that Stronghold failed to meet this obligation between June 2021 and May 2022 and instead diverted electricity to its bitcoin mining operations.
According to FERC’s investigation, Scrubgrass underreported the amount of power it had available to the market by 67% of its day-ahead capacity and 69% of its real-time capacity. It diverted power to bitcoin mining rather than providing it to PJM by 57% of its day-ahead capacity and 59% of its real-time capacity.
Additionally, FERC noted in the settlement order that 24% of the time Stronghold purchased electricity from PJM at wholesale prices, some of which was misclassified as "station power" rather than used for necessary plant operations.
As part of the settlement, Stronghold and Scrubgrass will repay $678,635 in ill-gotten gains to PJM and pay a $741,365 civil penalty to the U.S. Treasury. The company must also file compliance reports for at least two years and provide training to employees on market rules.