BRAINERD — Plans are moving forward for two cryptocurrency mining facilities in Brainerd.

After two companies approached the city late last year about buying industrial park property and setting up cryptocurrency mining operations, land sales have gone through, and power agreements are taking shape.

Cryptocurrency is a form of digital money that is decentralized and can be used to buy goods over the internet and exchange money without a bank being involved. While there are thousands of cryptocurrencies and counting, Bitcoin has emerged as the most popular one. Cryptocurrency mining is the energy-intensive process of extracting digital money by solving complex puzzles via supercomputers.

While both companies — local Clough Properties and Texas-based B&D Power Solutions — initially vied for the same property for their facilities, the former since decided to purchase an existing building elsewhere in the industrial park.

The Economic Development Authority agreed March 3 to sell the two industrial park parcels to VCV Digital Infrastructure Minnesota LLC — the legal entity purchasing the property on behalf of B&D Power Solutions — for $277,815.

The Brainerd Public Utilities Commission approved a purchase power agreement with VCV Digital in February, ensuring the company its requested 50 megawatts of power a month. A similar purchase agreement with Clough Properties for 20 megawatts is in the works.

Brainerd’s extra power capacity makes the city an attractive location for cryptocurrency mining. When a new BPU substation was built in 2008, its capacity was based on future growth projections for the city, leading to three transformers each capable of handling 47 megawatts of power. The peak energy use for BPU’s coverage area during the year is 40 megawatts, roughly 100 megawatts less than the total capacity.

Neither company will use their max capacity to begin with, BPU Finance Director Todd Wicklund said. They will likely ramp up to that amount over several months.

The approved purchase agreement with VCV Digital states the power is interruptible, meaning if power had to be shut off for any reason, the power to the cryptocurrency facility would be the first to go before the rest of the city. While not yet approved, Wicklund said the agreement with Clough Properties will be largely the same.

At their meeting Tuesday, March 29, BPU Commissioners also approved an agreement with American Electric Power — BPU’s energy supplier — to purchase the necessary power when needed. Once the cryptocurrency companies go online, AEP will provide BPU with the cost for the energy, and BPU will in turn bill the companies.

Because energy costs fluctuate frequently, the exact cost for the crypto power is not yet known.

With that agreement approved, the next step, Wicklund said, is for the two companies to decide how they want to purchase the power. They could buy the power on a month-to-month basis, taking their chances on the market with the understanding that energy prices are likely to rise, or they could lock in lower prices through longer contracts, like for six months or a year.

The recent progress on the two cryptocurrency mining facilities comes after an emotionally charged EDA meeting last December. The two companies requesting the same land, as well as widespread misinformation on social media about the City Council’s role in the process, made for raised voices, a hasty exit and even an accusation of bribery.

Despite the heated meeting, the EDA agreed to move into negotiations with both companies for the land, allowing the buyers to also work with BPU on the power agreements.

THERESA BOURKE may be reached at theresa.bourke@brainerddispatch.com or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa .