Riot Platforms, Inc. (NASDAQ: RIOT), a firm focused on Bitcoin mining and data center hosting, issued a statement in response to recent inquiries regarding its power strategy following its August monthly operations update.
In particular, “on September 6, 2023, CNBC published a story titled Texas paid bitcoin miner Riot $31.7 million to shut down during heat wave in August.”
According to Riot, unfortunately, “this sensational and inaccurate headline has caused confusion, which we would like to dispel.”
In August, Riot claims that it “provided over 84,000 megawatt hours of energy to the market in Texas to reduce overall demand, lower consumer prices, and stabilize the grid during a heat wave.” This ensured that consumers did “not experience disruptions during extreme temperatures.”
Riot says that it “earned approximately $7 million from the Electric Reliability Council of Texas, Inc. (ERCOT) ancillary services program. ERCOT is “a membership-based independent system operator, which operates about ninety percent of the electric grid in Texas, helping to deliver power to 25 million customers across a geographic area larger than most countries. ERCOT’s primary responsibilities are to maintain system reliability, facilitate competitive wholesale and retail energy markets, and to ensure open access to power transmission.”
The ancillary services program is “a competitive bidding process in which certain large customers in ERCOT’s market bid for the grid operator to pay them a fee that is similar to an insurance premium, which then affords ERCOT the right to control the customer’s electrical load to ensure grid stability.”
Riot’s premium amounts to “less than one percent of the program, which administered nearly $1 billion during this time period.”
Riot reportedly also “sold approximately $24 million of pre-purchased energy to its energy provider, TXU, pursuant to its long-term power purchase agreements. TXU is a retail electricity provider and subsidiary of Vistra Corp., which is a publicly traded enterprise valued at over $12 billion.”
When economically efficient to do so, Riot does “not use the energy it has purchased for business operations and instead sells it back to TXU in exchange for credits to apply to future energy bills.”
Riot actively participates in several demand response programs “for the benefit of all Texans. Many industries in addition to bitcoin miners participate in such programs, including steel mills, electrical battery companies, oil and gas companies, and power generators.”
These programs utilize market forces “to drive grid stability.” For example, in one such program, participants “are incentivized to reduce their electricity consumption during peak demand and increase their consumption during off-peak times to utilize energy that would otherwise be wasted.”
Riot Platforms employs hundreds of Texans and is “helping to revitalize communities that had experienced economic hardship.” They are looking forward “to contributing to the overall health and prosperity of the state that has helped our company to grow into the innovative, thriving team that it is today. ”
As covered, Riot’s vision is “to be the world’s leading Bitcoin-driven infrastructure platform.”
Their mission is to “positively impact the sectors, networks, and communities that they touch.”
They believe that “the combination of an innovative spirit and strong community partnership allows the Company to achieve best-in-class execution and create successful outcomes.”
Riot is a Bitcoin mining and digital infrastructure company “focused on a vertically integrated strategy.”
The company has data center “hosting operations in central Texas, Bitcoin mining operations in central Texas, and electrical switchgear engineering and fabrication operations in Denver, Colorado.”