To End a Lawsuit, Department of Energy Agrees to Halt its Survey Seeking Data from Crypto Miners

The Texas Blockchain Council (TBC) describes itself as a nonprofit industry association that works to make the State of Texas the jurisdiction of choice for cryptocurrency, blockchain and digital asset innovation.  Riot Platforms, Inc. is a TBC member and Bitcoin mining company.  On February 22, 2024, the two sued the United States Department of Energy (“DOE”), the U.S. Energy Information Administration (“EIA”) and the Office of Management and Budget (“OMB”), among others, for what Plaintiffs described as “sloppy government process, contrived and self-inflicted urgency, and invasive government data collection.”  On March 1, 2024, the parties entered into a settlement agreement on terms very favorable to Plaintiffs. 

The facts of the case, taken from the recent settlement, are as follows.  On January 24, 2024, EIA requested that OMB approve the emergency collection of information under Form EIA-862, Cryptocurrency Mining Facilities Survey (the “EIA-862 Emergency Collection Request”), pursuant to the emergency collection procedures of the Paperwork Reduction Act (“PRA”).  OMB approved the emergency collection of information within days.

In or around late January or February 2024, EIA sent Form EIA-862 to certain parties engaged in cryptocurrency mining with an initial response deadline of February 23, 2024, and subsequent response deadlines of the last Friday of each month.  On February 9, 2024, EIA published a notice in the Federal Register pursuant to the PRA’s notice-and-comment procedures that it was proposing a three-year collection of the Cryptocurrency Mining Facilities Survey.

On February 22, 2024, Plaintiffs filed their Complaint, alleging, among other things, that the EIA-862 Emergency Collection Request, the EIA-862 Emergency Collection Approval, and the collection of information through the EIA-862 Emergency Survey violated the PRA and the Administrative Procedure Act, and did not comply with various statutory and regulatory requirements for the emergency collection of information. 

As one specific example, Plaintiffs pointed to the fact that EIA sought to justify the reduced timeline based on “public harm” that it attributed to (i) the rising price of Bitcoin, that might incentivize more mining activities, but (ii) which occurred during a “cold snap” that resulted in high electricity demand, the combined effects of which could cause uncertainty in the power markets.  But, Plaintiffs alleged, “The agency’s purported justification does not withstand even minimal scrutiny because—as demonstrated by [the]  data—during a ‘cold snap,’ miners are some of the first electrical loads to be curtailed to ensure grid stability.”

With the Complaint, Plaintiffs also sought a temporary restraining order.  It was granted a day later, on February 23, 2024, and ordered that “Defendants are: 1. restrained from requiring Plaintiffs or their members to respond to the Survey, 2. restrained from collecting data required by the Survey, and 3. shall sequester and not share any such data that Defendants have already received from Survey respondents.”

Three days after the TRO, OMB wrote to EIA and stated that it was immediately withdrawing emergency collection under Form EIA-862.  EIA also said that it had “decided that it will not proceed through the emergency collection procedures . . . with respect to an information collection covering data of the type described in Form EIA-862,” and would, instead, “proceed through the PRA’s notice-and-comment procedures . . . to determine whether to request that OMB approve any collection of information covering such data.”  The upshot of this action was that no person or entity was subject to any obligation to respond to Form EIA-862.

As part of the settlement, EIA agreed to destroy any information that it had already received in response to the EIA-862 Emergency Survey, as well as any additional information it might receive in the future.  The settlement also compelled the DOE to utilize a standard “public notice and comment” process if they choose to gather similar data in the future.  Plaintiffs also paid $2,199.45 in legal fees and costs.  In other words, Plaintiffs seemingly received exactly what they sought in their Complaint.