Greenidge Generation Holdings Inc. (Greenidge) operates as a vertically integrated cryptocurrency datacenter and power generation company.
The company owns and operates facilities at two locations with a mining capacity of 76 MW: the Town of Torrey, New York (the ‘New York Facility’) and Spartanburg, South Carolina (the ‘South Carolina Facility, together with the company’s New York Facility, the ‘facilities’). In 2022, the company’s continuing operations were consisted of two primary revenue so...
Greenidge Generation Holdings Inc. (Greenidge) operates as a vertically integrated cryptocurrency datacenter and power generation company.
The company owns and operates facilities at two locations with a mining capacity of 76 MW: the Town of Torrey, New York (the ‘New York Facility’) and Spartanburg, South Carolina (the ‘South Carolina Facility, together with the company’s New York Facility, the ‘facilities’). In 2022, the company’s continuing operations were consisted of two primary revenue sources.
Cryptocurrency Datacenters
As of December 31, 2022 and through the signing of Hosting Agreements on January 30, 2023, the company’s cryptocurrency datacenter operations generated revenue in the form of bitcoin by earning bitcoin as rewards and transaction fees for supporting the global bitcoin network with application-specific integrated circuit computers (‘ASICs’ or ‘miners’) owned or leased by the company. The company converted substantially all of its earned bitcoin into the U.S. dollars.
On January 30, 2023, as part of an overall debt restructuring, Greenidge transferred ownership of miners with capacity of approximately 2.8 EH/s to its lender, NYDIG ABL LLC (‘NYDIG’). Concurrently, Greenidge and certain NYDIG affiliates entered into hosting agreements, whereby Greenidge agreed to host, power and provide technical support services, and other related services to NYDIG's affiliates miners at its two facilities (the ‘Hosting Agreements’).
Greenidge owns approximately 10,000 miners with a capacity of approximately 1.1 EH/s. Greenidge is actively pursuing opportunities to install and operate these miners, which may be in arrangements where those miners would be hosted by a third party. Greenidge’s ownership of these miners did not change as a result of the aforementioned debt restructuring.
Hosting Agreements
On January 30, 2023, Greenidge entered into the Hosting Agreements, which resulted in a material change to the company’s business strategy with the company largely operating miners owned by NYDIG affiliates. Under these agreements, the company agreed to host, power and provide technical support services, and other related services, to NYDIG affiliates’ mining equipment at certain Greenidge facilities for a term of five years. The arrangement covers all of the company’s mining capacity at the New York and South Carolina facilities. Greenidge expects to deploy its approximately 10,000 miners, with capacity of approximately 1.1 EH/s, disclosed above at third-party hosted facilities during 2023.
Independent Electric Generation
The company owns and operates a 106 MW power generation facility that is connected to the New York Independent Systems Operator (the ‘NYISO’), which operates New York state’s power grid. The aforementioned debt restructuring did not alter the company’s ownership of this facility and the company plans to continue to operate such facility. The company sells electricity to the NYISO at all times when the plant is running and the company increases or decreases the amount of electricity sold based on prevailing prices in the wholesale electricity market and demand for electricity. In addition, the company receives revenues from the sale of its capacity and ancillary services in the NYISO wholesale market. Through these sales, the company generates three revenue streams:
Energy Revenue: When dispatched by the NYISO, the company receive energy revenue based on the hourly price of power.
Capacity Revenue: The company receive capacity revenue for committing to sell power to the NYISO when dispatched.
Ancillary Services Revenue: When selected by the NYISO, the company receive compensation for the provision of operating reserves.
The company’s datacenter operations in New York are powered by electricity generated directly by the company’s power plant, which is referred to as ‘behind-the-meter’ power as it is not subject to transmission and distribution charges from local utilities. As of December 31, 2022, the company’s owned ASICs at the New York Facility had the capacity to consume approximately 56 MW of electricity. The company has approval from NYISO to utilize 64 MW of electricity behind-the-meter.
Support Services
On January 17, 2023, Greenidge completed the sale of certain assets of Support.com. The company is actively pursuing the sale of the remaining portion of the Support.com business, which includes the existing active customer contracts, information technology platforms including the website, and the remaining workforce. On December 31, 2022, the company classified the Support.com (Support.com, Inc., a wholly owned subsidiary of Greenidge) business as held for sale and discontinued operations.
Products and Services
Cryptocurrency Datacenter Operations
The company began mining bitcoin in 2019 with the construction of a pilot datacenter to operate approximately 9 PH/s of bitcoin mining capacity located at the company’s New York Facility. The company launched a commercial data center for bitcoin mining and blockchain services in January 2020, and as of December 31, 2022, the company had approximately 24,200 miners deployed on the company’s two sites capable of producing an aggregate hash rate capacity of approximately 2.4 EH/s.
On January 30, 2023, the company signed the Hosting Agreements and will generate revenue through hosting fees, which include a profit sharing component. As of January 30, 2023, the company continue to own approximately 10,000 miners with a capacity of approximately 1.1 EH/s, and the company will be evaluating options to install these miners at facilities that are hosted by third parties.
Power Generation Operations
The company sells capacity, energy and ancillary services from its approximately 106 MW nameplate capacity power generation facility and sells power that the company generates, at wholesale, to the NYISO when dispatched, based on the NYISO’s daily supply and demand needs. The company began its energy sales in 2017 when the company’s power generation facility came back online after converting from a coal-fired to a natural gas-fired facility. The company sells a contractual minimum amount of electricity to NYISO at all times the company’s New York Facility is operating. The company participates in the daily power bidding process and will increase the amount of power sold to the grid when the market rates are favorable to do so. At times, the company curtails mining to increase the amount of capacity sold to the grid when it is the more profitable revenue stream based on the daily market rates.
The company has a contract with Empire Pipeline Inc., which provides for the firm transportation to the company’s pipeline of up to 15,000 dekatherms of natural gas per day. The natural gas is transported to the company’s captive lateral pipeline through which this gas is transported 4.6 miles to the company’s power plant. The company has contracts with Emera Energy covering both the purchase of natural gas and the bidding and sale of electricity through the NYISO.
Government Regulation
Greenidge Generation holds a Certificate of Public Convenience and Necessity issued by the NYS Public Service Commission (the ‘PSC’) under section 68 of the Public Service Law. In addition, it has been granted lightened regulation by the PSC and Market Based Rate Authority by the Federal Energy Regulatory Commission (the ‘FERC’) authorizing it to enter into sales of power in interstate commerce at market-based rates. It is connected to the New York State Electric & Gas Corporation (‘NYSEG’) transmission system by virtue of the Large Generation Interconnection Agreement among Greenidge Generation, the NYSEG and the NYISO.
The company is a public utility holding company under the Public Utility Holding Company Act of 2005 (‘PUHCA’), and has applied for and received exemption from the record keeping and records inspection regulations of PUHCA.
One of the company’s subsidiaries, Greenidge Pipeline LLC (‘Greenidge Pipeline’), operates pursuant to a Certificate of Environmental Compatibility and Public Need issued by the PSC under Article VII of the Public Service Law. It is exempt from regulation by the FERC, under the National Gas Act (‘NGA’) pursuant to Section 1(c) of the NGA, due to the fact that all of the gas transmitted through the pipeline is delivered within the state of New York and the rates for delivery are regulated by the PSC.
Regulations Applicable to Power Generation Business
The company operates its electricity generating business subject to the following regulatory regimes:
The New York State Public Service Commission
Greenidge, GGH LLC and Greenidge Generation are each defined as ‘electric corporations’ subject to regulation by the PSC under New York’s Public Service Law.
Greenidge Pipeline and Greenidge Pipeline Properties Corporation are ‘gas corporations’ subject to regulation by the PSC under New York’s Public Service Law.
Greenidge Pipeline and Greenidge Pipeline Properties Corporation operate their approximately 4.6 mile gas pipeline under the terms of a certificate of environmental compatibility and public need issued by the PSC.
The Federal Energy Regulatory Commission
Greenidge Generation is a public utility subject to regulation by the FERC under the Federal Power Act (the ‘FPA’).
Although the gas pipeline owned and operated by Greenidge Pipeline transports gas supplies flowing in interstate commerce, it is regulated by the PSC rather than by FERC because all of the pipeline’s facilities are located in, and all of the gas it delivers is consumed in, New York State and its rates are regulated by the PSC.
Because Greenidge Pipeline operates exclusively as a provider of delivery services for gas supplies owned by others, it is not a ‘gas utility company’ under the Public Utility Holding Company Act of 2005 which expands the authority of FERC to oversee transactions and other financial activities of public utility holding companies through grants of access to those companies’ books and records.
In addition, the company, GGH, and Atlas and certain of its affiliates are all holding companies under the PUHCA, which is also administered by FERC.
Both Greenidge Generation and Greenidge Pipeline have lease/leaseback relationships in place with the Yates County Industrial Development Agency, which relationships also include a payment in lieu of tax agreement.
The operations of each of Greenidge Generation and the landfill owned by another subsidiary of Greenidge, Lockwood Hills LLC (‘Lockwood Hills’), are subject to numerous NYSDEC and EPA regulations and requirements. Lockwood Hills operates a landfill and leachate management facility (the ‘Landfill’). Most of the EPA requirements that Greenidge Generation and Lockwood Hills are subject to are delegated to the NYSDEC and are regulated through permits issued by NYSDEC.
Greenidge Generation’s operations are subject to the following NYSDEC-issued permits: Clean Air Act Title IV and Title V permits, Clean Water Act SPDES, and New York State Water Withdrawal Permit. Greenidge Generation also holds a Petroleum Bulk Storage registration issued by NYSDEC, which includes requirements applicable to the petroleum storage tanks located at the facility. The Landfill is subject to the following NYSDEC-issued permits: SPDES Permit and Part 360 Solid Waste Management Permit.
The Clean Air Act Title IV and Title V permits authorize Greenidge Generation to fire natural gas (with up to 19% biomass co-firing) to produce electricity in accordance with the requirements of these permits. These permits regulate air emissions associated with the company’s operations and include all applicable Clean Air Act and New York State requirements. Greenidge Generation is also subject to the RGGI, which is a multi-state cap and trade program for carbon dioxide emissions that requires Greenidge Generation to purchase one RGGI allowance for every ton of CO2 emitted from the facility.
Having timely completed the company’s application to renew the company’s Title V air permit, the company is permitted to operate uninterrupted under a State Administrative Procedures Act extension, in full compliance with the company’s existing Title V Air Permit, until final resolution of the adjudicatory hearing process.
The Landfill, which is located approximately 0.4 miles from the Greenidge Generation facility, discharges stormwater and treated leachate to the Keuka Lake Outlet in accordance with a SPDES permit issued by NYSDEC. The Landfill is also subject to a Part 360 Solid Waste Management Facility permit issued by NYSDEC. Lockwood Hills is subject to EPA’s Coal Combustion Residuals Rule (the ‘CCR Rule’), as a coal combustion residual (‘CCR’) landfill.
Greenidge Generation is also subject to the CCR Rule, which requires that the onsite CCR surface impoundment associated with previous coal-fired operation of the facility, be closed.
History
Greenidge Generation Holdings Inc. was founded in 1937. The company was incorporated in the state of Delaware in 2021.
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