In Oak Valley, a sleepy town in rural Navarro County, Texas, there’s very little of anything. A potholed road winds through the two square miles of sun-drenched grassland, past a modest, prefab community center and a “poor excuse for a park,” as the local mayor describes it.
Only about 400 people live in Oak Valley. But despite its small size and few resources, the Texas hamlet is preparing to unusually place an industrial-scale bitcoin mine within its borders, a move that could increase its annual budget by as much as 40 times.
Four miles from Oak Valley on a 650-acre plot of land, public crypto mining company Riot Platforms is busily building what it says will be the world’s largest bitcoin mining facility. Once complete, it will consume up to 1 gigawatt of energy, enough to power hundreds of thousands of homes.
The Riot facility currently sits on a piece of unincorporated land in the jurisdiction of the Navarro County government. But the company is in the process of negotiating a deal, according to a series of emails seen by WIRED, that would see the parcel annexed by Oak Valley.
The annexation plan, which has yet to be finalized, will allow for much-needed improvements to Oak Valley’s roads and other public infrastructure. It also won’t cost Riot anything, because the utility that serves the area will foot the bill. For Riot, it’s a public relations ploy designed to curry favor with local residents and county officials, which stands in the way of a lucrative property tax break. Millions of dollars could depend on its ability to win local support in Navarro County before a final decision is made on the forgiveness application.
Riot declined to comment on the prospect of an annexation by Oak Valley. Brian Morgenstern, Riot's chief public policy officer, said only that “an annexation would have to be good for all parties.” “We want to make sure we're good neighbors and have a positive impact on the community,” he said.
To fund public works, a township like Oak Valley must rely primarily on money collected from the electric utility in exchange for use of local rights-of-way. These so-called franchise fees are calculated as a percentage of residents’ utility bills. Under normal circumstances, Oak Valley collects about $9,000 in franchise fees per year, which is 75 percent of a meager overall budget that is insufficient to cover simple infrastructure improvements.
“Oak Valley doesn’t have any money,” said David Brewer, a commissioner with the Navarro County Commissioner’s Court, the county’s governing body. “Our county budget is extremely tight, so we can’t help some of the areas we want to help.”
However, if Oak Valley succeeds in annexing the energy-guzzling Riot facility, Brewer says, it will swallow franchise fees “worth a quarter to a half million dollars a year” once the 1-gigawatt plant is completed.
The leader of the annexation movement is Max Taylor, the mayor of Oak Valley, who declined to be interviewed for this story. After a 2019 change in Texas law, municipalities can no longer forcibly annex a piece of land, so they must ask the landowner for permission. But Taylor appears to have had little trouble convincing Riot: “This project has my full support,” David Schatz, Riot’s senior vice president of operations, wrote in an email to Taylor on June 25.
