Bitcoin
A small Texas town is about to annex a massive Bitcoin mine
In Oak Valley, a sleepy village in rural Navarro County, Texas, there is very little of anything. A rutted road winds through its two square miles of sun-baked pastureland, past a modest prefab community center and a “poor excuse for a park,” as the local mayor describes it.
Just about 400 people lives in Oak Valley. But despite its tiny size and few resources, the Texas village is preparing to double its borders, using unusual means, as an industrial-scale bitcoin mine — a move that could increase its annual budget by as much as forty times.
Four miles away from Oak Valley, on a 265-acre plot of land, public cryptocurrency mining company Riot Platforms is busy building what is expected to become the world’s largest bitcoin mining facility, according to the company. Once completed, it will consume up to 1 gigawatt of energyenough to power hundreds of thousands of homes.
Riot’s facility currently sits on a piece of unincorporated land under the jurisdiction of the Navarro County government. But the company is in the process of negotiating a deal, as evidenced by a series of email communications seen by WIRED, under which the parcel will be annexed by Oak Valley.
The annexation plan, which has not yet been finalized, will make it possible much needed improvements to Oak Valley roads and other public infrastructure. It won’t even cost Riot anything, because the power company that serves the area will foot the bill. For Riot, it’s a public relations ploy, designed to curry favor with local residents and county officials who stand to gain a lucrative rebate on their property taxes. Potentially millions of dollars are riding on its ability to garner local support in Navarro County before a final decision on its abatement request is made.
Riot declined to comment on the prospect of an annexation by Oak Valley. Brian Morgenstern, Riot’s head of public policy, would say only that “annexation has to be good for all parties.” “We want to make sure we’re being good neighbors and having positive impacts on the community,” he said.
To fund public works, a municipality like Oak Valley has to rely largely on money collected from the electricity provider in exchange for the use of local rights-of-way. These so-called franchise fees are calculated as a percentage of residents’ energy bills. Under normal circumstances, Oak Valley collects about $9,000 in franchise fees per year, which makes up 75 percent of a meager total budget that is insufficient to cover simple infrastructure improvements.
“Oak Valley doesn’t have the money,” says David Brewer, a commissioner on the Navarro County Commissioners Court, the county’s governing body. “Our county budget is extremely tight, so we can’t help some of the areas we want to help.”
However, if Oak Valley is successful in annexing the energy-hungry Riot facility, Brewer says, it will collect franchise fees “in the range of a quarter to half a million dollars a year” when the 1-gigawatt plant is completed.
Leading the movement for annexation is Max Taylor, the mayor of Oak Valley, who declined to be interviewed for this story. After a change of legislation As of 2019, Texas municipalities can no longer forcibly annex a parcel of land, so they must seek permission from the landowner. But Taylor appears to have had little trouble convincing Riot: “This project has my full support,” David Schatz, Riot’s senior vice president of operations, wrote in an email to Taylor on June 25.