By Thomas Clouse
The Spokesman-Review

The company that runs a cryptocurrency operation in Usk is seeking a $400,000 grant from the state that it says will help to restart a shuttered papermill even though the site doesn’t have access to the electrical power needed to operate the plant.

The grant request by Ponderay Industries is seeking money from the Evergreen Manufacturing Growth program that is administered by the state Department of Commerce.

According to state literature, the grants come from a $2 million pool of funding designed to “increase the number of manufacturing and research and development jobs in Washington State.”

“This grant will help restart what is essentially a brownfield industrial site bringing approximately 120 family-wage, manufacturing jobs back into Washington State,” the grant request from Ponderay Industries states.

However, the mill site, which is now home to a cryptocurrency mining operation called Merkle Standard, was told by the Bonneville Power Administration in 2022 that it could not operate both the data mining operation and the papermill without at least $40 million in infrastructure upgrades.

Pend Oreille County Commissioner Robert Rosencrantz said he doesn’t think its proper for Ponderay Industries, which owns the mill, to seek grant money if it knew it didn’t have a source of power.

“If there is a chance for that papermill to restart, and they can somehow get the power, I will be the biggest cheerleader for those jobs,” Rosencrantz said. “But I don’t want Pend Oreille County to get the reputation for supporting nonviable grant requests.

“I hope that Commerce does its due diligence and confirms or denies the viability of restarting.”

Ben Richards, a retired U.S. Army major who questioned many of the claims made by the mill last year in its process to obtain a conditional use permit to operate the cryptocurrency mining operation, said the mill is not being forthright in its grant application. 

“At a minimum, they are submitting this grant without a positive confirmation that they could open the mill,” said Richards, who once taught at West Point.

Lee Keller, a spokeswoman for Ponderay Industries, said there is nothing nefarious behind the grant request.

“Everybody is very, very eager and sincere to making this work for the region,” Keller said.

Keller acknowledged that the mill does not now have the power needed to operate. But she put that responsibility squarely on the Pend Oreille County Public Utility District.

“We believe the PUD has a duty to serve its customers, both industrial and residential,” Keller said. “We continue to be optimistic and hopeful that the power needed will be available for us.”

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