FERC Approves Settlement Penalizing Crypto Mining Company For Violating NYISO Interconnection Rules

On August 3, 2026, the Federal Energy Regulatory Commission (“FERC”) approved a settlement agreement (the “Agreement”) between the Office of Enforcement and Regulatory Accounting (“Enforcement”) and a cryptocurrency mining company, Digi Power X Inc. (“Digi Power”),¹ resolving allegations that Digi Power violated Section 3.9.1 of the New York Independent System Operator (“NYISO”) Open Access Transmission Tariff (“NYISO OATT”) rules from February 2022 to April 2022 (the “Relevant Period”) by interconnecting its cryptocurrency load to a co-generation facility without first submitting the required interconnection proposal to NYISO. Digi Power stipulated to the facts set forth in the Agreement but neither admitted nor denied the alleged violation. The enforcement investigation began at FERC – as many investigations do – when an RTO/ISO market monitor (here, Potomac Economics, Ltd., NYISO’s Market Monitoring Unit) referred the conduct to Enforcement in July 2024.

The Agreement requires Digi Power to (a) pay a civil penalty of $45,000 to the United States Treasury; and (b) provide compliance monitoring reports to Enforcement. These costs, of course, do not include the significant attorney’s fees the company likely incurred in handling the investigation.

This is not the first time FERC has enforced tariff rules against a large load retail customer, as reported in a 2025 client alert on another crypto mining enforcement settlement.² As co-location and dedicated power facilities become more commonplace in the energy sector, FERC has emphasized once again that large load customers must operate under FERC market rules.

I. Relevant Conduct

During the Relevant Period, Digi Power was a crypto mining company primarily focused on mining Bitcoin. To power its operations, Digi Power purchased a 55 MW co-generation facility located in New York and interconnected to the 115kV transmission system of Niagara Mohawk Power Corporation d/b/a National Grid (the “Facility”).

Prior to the acquisition, Digi Power interconnected its cryptocurrency load to the Facility. While Digi Power had begun discussions with NYISO about the load, it failed to submit an interconnection proposal to NYISO at any point before or during the Relevant Period.

Soon after interconnecting, the Facility experienced increased demand, which was not preceded by proper notice or analysis, as would have occurred during the required interconnection study process. Digi Power’s load included on-site fluctuations and a peak load of approximately 30 MWs. National Grid sent a letter to Digi Power warning the company to reduce its demand at the Facility, or face the possibility of National Grid tripping its load. After National Grid sent a second warning letter, Digi Power dropped its load entirely. These circumstances led to the NYISO market monitor’s referral to Enforcement.

II. Violation

Enforcement determined that Digi Power violated the NYISO tariff³ when it interconnected its cryptocurrency load to the Facility without submitting an interconnection proposal to the ISO. The NYISO tariff requires that any customer proposing to interconnect its load must submit an interconnection proposal, after which the ISO will perform technical studies to ensure proposed interconnection would not degrade system reliability. Digi Power did not submit an interconnection proposal before or during the Relevant Period.

III. Lessons Learned

The energy landscape has been rapidly evolving in response to large loads, especially crypto miners and data centers, and a great deal of FERC’s current regulatory focus is ensuring this evolution and expansion does not compromise grid reliability. It is clear from this settlement, the Stronghold settlement, and other recent enforcement activity focused on compliance with power grid operation rules, that FERC is actively using its Enforcement office to ensure that large loads and generators strictly follow market rules. Especially where a rule is intrinsically linked to grid reliability – such as, here, interconnection study requirements – large loads need to incorporate rigorous FERC compliance practices so they can focus on managing and growing operations while avoiding the time and expense of an enforcement investigation.

Footnotes

1 Order Approving Stipulation and Consent Agreement, 196 FERC ¶ 61,100 (August 3, 2026) (Digi Power was formerly known as Digihost Technology Inc.).

2 On February 5, 2025, Baker Botts published an alert for a similar enforcement action, under which a bitcoin mining company was required to disgorge capacity revenues, pay a civil penalty, and provide compliance training and corresponding compliance reports. See FERC Approves First Enforcement Settlement Involving Power Plant Operations by Bitcoin Mining Company. (discussing Order Approving Stipulation and Consent Agreement, 190 FERC ¶ 61,059).

3 NYISO Tariff, Section 3.9.1.