BTC miner Hut 8 sues power supplier for breach of power purchase contract

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BTC block reward mining firm Hut 8 (NASDAQ: HUT) has filed a lawsuit against its power supplier, alleging a failure to meet contractual obligations.

Hut 8 filed a Statement of Claim in the Superior Court of Justice of Ontario, accusing Validus Power Corp. of “failure to meet its contractual obligations in the power purchase agreement (“PPA”) it entered into” with the miner.

The two companies have been in an ongoing dispute for months over the supply of electricity for Hut 8’s North Bay, Ontario facility.

Hut 8 and Validus started working together in late 2021, with the power company pledging an initial 35 megawatts of power to the miner in Ontario. Validus would then ramp up the supply to 100 MW. However, according to the miner, Validus was only supplying 20 MW by July 2022.

While announcing its Q3 financial results last November, Hut 8 took aim at Validus, claiming it “had failed to achieve certain key operational milestones by the dates contemplated under the terms of the power purchase agreement (“PPA”).” Validus also reportedly hiked the power prices.

Since then, the miner has claimed it would try to settle the dispute through mediation, seeking to maintain a good relationship with the power supplier.

Validus has reportedly cut off power to the North Bay facility, and it remains offline today. The site, which was one of three such facilities operated by Hut 8, had 8,800 BTC mining rigs.

In its lawsuit, the miner is seeking “various relief including enforcement of certain provisions of the PPA and monetary damages incurred as a result of the dispute.”

Disputes between miners, clients, and power suppliers have become common in the past year as the bear market threatened the block reward business model miners rely on.

As CoinGeek reported, bankrupt Core Scientific (NASDAQ: CORZQ), one of the largest BTC miners globally, announced it was shutting down 37,000 mining rigs owned by Celsius Network, another defunct company, in January 2023.

Compass Mining, another bankrupt miner, took its hosting services provider Dynamics Corp. to court and recently won a $1.5 million settlement. Dynamics had ended its hosting agreement with Compass for non-payment, a claim the miner successfully refuted in court.

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