In a last-minute effort to restrict future development of bitcoin mines and data centers in Johnson County, County Mayor Larry Potter introduced a resolution to adopt the Tennessee “County Powers Act.” On Thursday, that resolution failed in a divided vote of the County Commission.
If passed, it would have granted the county limited powers to restrict business developments as specified by the commission, including cryptocurrency mines.
The move comes after the people of Mountain City – the county seat – fought for months against closed-door plans to build a bitcoin mine in the middle of town which were spurred forward by city officials and the county’s utility, Mountain Electric. The electric company lost its largest customer after damage dealt by Hurricane Helene, and has been scrambling to find an industry which could foot the $1.5 million electricity bill left behind. But many people don’t think bitcoin is the answer.
After Thursday’s vote, Potter says the future of crypto development in Johnson County remains unclear.
“They're going to have to find a place with infrastructure in place,” Potter said. “So I don't know. I guess we'll all stay tuned to see.”
The outcome came as a surprise to many of the nearly 100 county residents who showed up at the meeting to express their support of the resolution. Some, such as Lori Blevins, said Mayor Potter had indicated they had the votes to opt into the County Powers Act.
“Mountain City residents and county residents, collectively, have voted overwhelmingly in opposition to any cryptocurrency mining operation or data processing center coming in,” she said. “So if it wasn't appropriate for Mountain City, why is it all of a sudden okay for Johnson County residents?”
Nobody came forward during the meeting’s public comment period to express opposition to the resolution. Several people, including Johnson County Republican Party Chairman Randy Dandurand, spoke in favor of it. Dandurand says he believes firmly that the majority of the people in the county support the use of the County Powers Act to prevent crypto development and other industries.
“I’m a little sick to my stomach,” Dandurand said. “Because I really thought we had the vote, and we don’t.”
WUOT News has learned that three of the six county commissioners who cast “no” votes – Gina Meade, Freddie Phipps and Rick Wallace – have connections to Mountain Electric. None of them identified these connections as conflicts-of-interest during the meeting.
Meade’s husband works for Mountain Electric and serves on the Mountain City Board of Zoning Appeals, which initially advanced a proposal to bring a bitcoin mine to the small town. She could not be reached by WUOT News for comment.
Wallace’s wife also works for the company. He says that did not impact his judgement, however.
“She did not sway my vote, or Mountain Electric did not sway my vote one way or the other,” Wallace said. “My mind was changed during the meeting.”
Phipps retired from a career at Mountain Electric 10 years ago. He says that didn’t influence his judgement. The utility’s General Manager Rodney Metcalf assured him that he will handle any potential contract with a bitcoin mine responsibly, in a way that would mitigate noise pollution and ensure plentiful grid availability for all residents.
“[Metcalf] guaranteed me that he has got a contract,” Phipps said. “They're going to put in these oil cooled units. It won't be the loud one like over there. Part of their contract they've got to build a fence all the way around the establishment, 16-foot tall with four-inch sound barriers. So that relieved me.”
Other “no” votes came from commissioners who said "a lot of people” or “everybody” they spoke to were against it. Jennifer Behm lives in the county and says that’s not true.
“I was surprised when I heard a couple of them say that everybody that talked to them did not want the resolution passed,” Behm said. “Because I spoke [to them] either in text, email or phone call, and so that just simply wasn't accurate.”
Commissioner Brian Taylor voted in favor of the resolution, but says he feels that the county might have “overplayed its hand.” All that was needed to stop cryptocurrency was a development moratorium aimed specifically at the industry, he says, but instead the commission opted for something larger than that.
“Last month we wanted to do a moratorium, just to put a pause on the cryptocurrency coming into Johnson County,” Taylor said. “And we were sort of met with some resistance on that.”
According to Taylor, some of the commissioners declined his request for a work session to plan the moratorium or further understand the county powers act.
Dandurand agreed that a moratorium was all that was needed, and says the Johnson County GOP is prepared to remove commissioners who voted against the resolution during the county’s upcoming primary election in May.
“What we're going to have to do now is take a look at who voted for it and who voted against it, the reason they did that, and then we need to find out if they have voted on other issues that we can't really accept,” Dandurand said. “So we're going to look at each one hard and see which ones we want to keep and which ones that need to go, that they're not representing the people like they should.”
Many of the commissioners who voted “no” said they were concerned that giving the county extra power over development could later be used against private property owners. Taylor says that’s not accurate.
“I'm 100% for private property rights, and doing what you need to on your property,” Taylor said. “I don't think they understood the County Powers Act would not infringe on that private property.”
Because there is no zoning in Johnson County, all a company would need to do to begin construction of a cryptocurrency mine would be to buy land and apply for a business permit. None of these steps require approval from the County Commission or its committees.
But Mountain Electric General Manager Rodney Metcalf has speculated that his prospective buyer, CleanSpark, may pass on the county altogether because of the controversy, and Mayor Potter insists nobody from the bitcoin mining company has reached out to him.
“I mean, they've not reached out to me whatsoever,” Potter said. “They may tomorrow, who knows?”
The adoption of the County Powers Act in Johnson County failed, with commissioners Jerry Gentry, Huey Long, James Lowe, Gina Meade, Freddy Phipps and Rick Wallace voting, “no,” and Eugene Campbell, Lester Dunn, Jerry Grindstaff, Megan McEwen, Cody Osborne, Tommy Poore and Brian Taylor voting, “yes.” Commissioners Tracy Greer and Kody Norris were absent.
