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University of Tennessee professor sues TVA over cryptocurrency records

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University of Tennessee professor sues TVA over cryptocurrency records

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Melanie Faizer, a journalist and professor at the University of Tennessee at Knoxville, is suing the Tennessee Valley Authority for alleged violations of the Freedom of Information Act, a federal law that allows members of the public to gain access to a federal agency's records.

Faizer, a former interim news director at UT NPR member radio station WUOT, first requested access to documents related to TVA's secret economic stimulus grants to cryptocurrency companies in April 2023.

She examined cryptocurrency mining operations, huge computer systems that use electricity but don't create many jobs.

Digital currencies like Bitcoin must be “mined” by a large network of computers that perform complex calculations to create coins and verify transactions. A 2022 Knox News investigation found that mines have been popping up around East Tennessee, attracted by low-cost electricity and relaxed zoning restrictions. They are loud and often unpopular with residents.

For her reporting, Faizer wanted to know what incentives TVA gave a company called Bitdeer to build a mine at 5101 S. National Drive in East Knoxville in 2018.

The company used 9.4% of the Knoxville Utilities Board's total electricity in 2023 but only employed 30 people, Faizer reported. TVA stopped giving grants to crypto companies last year because they had little benefit to the local economy.

Faizer's report, published by WUOT in February, did not provide details about the incentives the federal utility gave to Bitdeer as part of its economic development mission because TVA did not provide the information it requested. Nearly a year before publishing her story, Faizer appealed TVA's decision to withhold records from her and the decision to ultimately provide heavily redacted documents.

In April, as a last resort, she took legal action against TVA, hiring attorney Paul McAdoo of the Reporters Committee for Freedom of the Press. The lawsuit, filed in the U.S. District Court for the Eastern District of Tennessee, alleges that TVA maintained a “pervasive secrecy” about its economic stimulus grants in violation of federal law.

TVA withheld key information about its incentives for Bitdeer, citing competition with other economic development organizations to attract businesses and the privacy of Bitdeer employees. The lawsuit says the information should not be excluded and that the public would benefit from knowing how TVA attracts certain businesses.

On July 30, Bitdeer filed a motion to join TVA in the lawsuit, arguing the utility could not adequately represent the company's interests. In a response, McAdoo claimed that the company's interests were the same as those of TVA and that if Bitdeer joined the lawsuit it would cause “undue delay and prejudice” to Faizer.

McAdoo is fresh off a successful record lawsuit against TVA and is representing Memphis journalist Marc Perrusquia. In September 2023, U.S. District Judge Ronnie Greer ordered TVA to disclose the salaries of four regional vice presidents, although the utility was allowed to redact their names. Perrusquia disclosed the salaries in a report for Tennessee Lookout.

Faizer and McAdoo declined to comment on the ongoing lawsuit. The case is scheduled to be tried without a jury in November 2025. According to the Justice Department, almost all FOIA lawsuits are resolved through summary judgment before trial because disputes over facts rarely arise.

TVA is aware of FOIA requests – and lawsuits

In a statement to Knox News, TVA spokesman Scott Fiedler said the agency takes its obligation to comply with FOIA seriously, but declined to comment on ongoing litigation.

“TVA is a transparent organization and we strictly adhere to FOIA guidelines to share information and keep the public informed of our actions,” Fiedler said.

Requests for records are commonplace for the federal agency, which is one of the few utilities subject to FOIA. Environmental groups and elected officials have long complained about a lack of transparency in TVA's planning processes and limited salary disclosures.

According to its most recent annual FOIA report, TVA processed 177 data requests between October 2022 and September 2023. Of the 177 applications, eight were completely rejected.

Lawsuits over FOIA requests are also known to the federal utility, the nation's largest public electric utility, serving 10 million customers throughout Tennessee and parts of six neighboring states.

Since 2019, TVA has defended itself against 11 FOIA lawsuits, including five ongoing ones. Five lawsuits have been filed so far in 2024, the highest number in years. TVA spent $123,498 on litigation related to records in the last fiscal year.

Federal law provides nine exceptions for denying records requests. By far the most common reasons TVA denies requests are to protect trade secrets, privacy, or communications protected by legal privilege. All three are involved in the legal dispute with Faizer.

A Government Accountability Office report released in March showed that the backlog of FOIA requests piled up to more than 200,000 in 2022 as federal agencies struggled to respond to requests in a timely manner.

Both the TVA headquarters and FOIA office are in Knoxville.

The environmental group has four ongoing FOIA lawsuits with TVA

Any member of the public, organization or interest group can request records from federal agencies, not just journalists or news organizations.

The Nashville-based Southern Environmental Law Center filed four consecutive FOIA lawsuits against TVA earlier this year on behalf of the climate groups Appalachian Voices, the Center for Biological Diversity and the Sierra Club. A spokesman for the law center said the four lawsuits “represent a small fraction of the number of unanswered FOIA requests.”

The series of lawsuits involves documents related to TVA's multibillion-dollar construction of 7,000 megawatts of natural gas power plants, enough to generate electricity for about 4 million homes. Although natural gas produces between 50 and 60% fewer carbon emissions than coal, the fossil fuel is unpopular among environmental groups.

TVA signed precedents with pipeline operators before seeking public input on gas-fired power plants. That includes the gas-fired power plant set to replace the Kingston coal-fired power plant, which is the subject of a separate lawsuit filed Oct. 10 by the Southern Environmental Law Center against TVA.

In its FOIA lawsuits, the Southern Environmental Law Center wants to see communications between TVA and pipeline companies, as well as studies TVA conducted to justify gas expansion.

Like many docket lawsuits, the four lawsuits filed by the legal center could drag on for years.

“Unfortunately, we had to sue to make these documents available to people across the valley so we can understand these important decisions that affect everyone,” Trey Bussey, an attorney at the Southern Environmental Law Center, told Knox News.

“Such information should be public from the start.”

Daniel Dassow is a growth and development reporter focusing on technology and energy. Phone 423-637-0878. Email [email protected].

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