Federal Judge Dismisses Lawsuit Against Greenidge Over Warm Water Discharges, Ruling State May Skip Over Federal Rules

ROCHESTER, Aug. 23, 2023 — A federal judge on Tuesday dismissed a lawsuit challenging the legality of Greenidge Generation’s massive warm water discharges into Seneca Lake.

Three environmental groups had sued to halt the discharges, claiming that Greenidge violated federal law when it applied to renew its state discharge permit without filing aquatic impact reports specifically required by the federal Clean Water Act.

But U.S. District Court Judge Elizabeth A. Wolford said the federal provisions “simply do not provide the governing standard” in the case.

“It is state law that is determinative of whether or not a state-issued permit may be administratively continued while a renewal application is pending,” she wrote in her 32-page order.

Michael Youhana, an Earthjustice attorney representing the plaintiffs, said his clients believe Greenidge continues to violate Clean Water Act standards. He said the judge had left open the option to refile and his clients were weighing “next steps.” 

Yvonne Taylor, vice president of Seneca Lake Guardian, the lead plaintiff, said:

“Those of us who live in the Finger Lakes experience Greenidge’s blatant disregard for our natural resources every day, no matter what the court says … We won’t stop fighting to get this corporate bully out, and to protect everything that makes the Finger Lakes special.”

Greenidge President Dale Irwin said: “Efforts like this latest failed lawsuit are why nobody listens to these gadflies any more; they have zero credibility.”

In a press release, Greenidge said this case marks the fourth time opponents have sued Greenidge in state or federal court since 2016, with environmental advocates losing all six major rulings, including appeals.

Greenidge operates an electric generating plant in Dresden that powers a Bitcoin mining operation. To cool its generating equipment, the plant withdraws tens of millions of gallons of lake water daily and then discharges it — at much higher temperatures — into Keuka Outlet, which immediately flows back into Seneca Lake.

Surveys of water temperatures around the outlet have shown that lake water temperatures far exceed the state’s three degree limit for artificial warming. Greenidge obtained a state wavier from that rule.

Plaintiffs have argued that those warm waters increase the likelihood of harmful algal blooms around Dresden Bay and severely damage aquatic life.

The power plant operates under a state-issued SPDES discharge permit issued in October 2017 by the state Department of Environmental Conservation. Although that five-year permit expired on Sept. 30, 2022, Greenidge applied to the DEC for renewal in January 2022. Under state law, a permit may be administratively extended indefinitely if the company has filed a “timely and sufficient” application for renewal.

The DEC state in a March 2022 email that the company’s application was “timely and sufficient.” And the Greenidge plant continues to generate power, mine Bitcoin and discharge warm water under an indefinite extension of its state discharge permit.

SLG, along with the Sierra Club and Committee to Preserve the Finger Lakes, had argued that the renewal application should have been disallowed because it failed to include reports analyzing the impact the warm water discharges were having on fish and other aquatic life. Greenidge didn’t dispute that the reports were never filed.

The federal Environmental Protection Agency issues water discharge permits for power plants. It also delegates to the states the authority to issue permits of their own, and it has rules states are expected to apply. 

But once that authority is officially delegated, Judge Wolford concluded, the state law governs.

She noted that plaintiffs never named the DEC as a defendant and never challenged the EPA’s delegation of permit authority to the state.

“Simply put, the fact that New York’s permit program is required to include standards that are at least as stringent as those contained in the relevant federal regulations does not mean — as both plaintiffs and Riverkeeper assume — that it is those federal regulations that provide the rule of decision in this case, and not New York’s laws and regulations,” said Wolford, the chief federal judge for the Western District of New York.

Riverkeeper had filed an amicus curiae brief in support of the plaintiffs. It argued that a ruling in favor of Greenidge would set a dangerous precedent by inviting other facility operators statewide to ask the DEC to help them sidestep explicit provisions in the federal Clean Water Act.

The case was argued for Greenidge by Yvonne Hennessey of the firm Barclay Damon.