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Locals worry how it will fit in ‘small-town USA’
EDITOR’S NOTE: This story ran in the Sunday, Sept. 27, 2026, issue of The Spokesman-Review. When contacted by The Miner for comment, Merkle officials made the following statement: “Merkle Standard has operated a data center at the Usk WA facility for about 5 years. As with any data center business, our core function is operating and maintaining computers. Our primary business is to keep computers online (and operating efficiently). Since our first data center operations started in late 2021, we have operated several types of computers, including specialized computers that help secure the global database for digital assets. We operate a large cluster of both general-purpose and dedicated ‘application specific’ (ASIC) computers. As an established data center business, we will continue these operations going forward.”
The data center controversy is coming to the Pend Oreille River.
The same company that promised, but failed, to bring one of the largest cryptocurrency mining operations in North America now wants to use its property in the northeast corner of Washington as a data center that could eventually use more than seven times the electricity of all other Pend Oreille County residents and small businesses combined.
Merkle Standard, which is owned by Irvine, California- based Allrise Capital Inc., began discussions in 2024 with the Pend Oreille County Public Utility District to see if it could boost its electricity load at the former Ponderay Newsprint papermill in Usk that went bankrupt in 2020 and eliminated 140 jobs.
According to records obtained by The Spokesman-Review, PUD general manager Chris Jones has been meeting with Merkle officials, who now call their company Merkle Standard Infrastructure, to discuss a power study and costs of necessary system upgrades that could eventually deliver 225 megawatts of electricity to the old papermill.
None of those discussions has been made public, and nothing has officially been presented to either Pend Oreille County commissioners or the Kalispel Tribe of Indians, which has a reservation directly across the Pend Oreille River from the papermill where the data center would be located.
“We’ve heard absolutely nothing,” county Commissioner Robert Rosencrantz said. “If they are such a good idea, how come people aren’t talking to us about it?”
The papermill, which had been the county’s largest employer before it closed, operated on about 87 megawatts a year, and the electrical infrastructure at the plant has the capacity to handle about 100 megawatts.
For scale, all the residential and small business customers of the PUD use an average of about 30 megawatts, said Curt Knapp, who will soon retire as a PUD commissioner.
“I get really nervous when they come after small-town USA,” Knapp said, referring to data center developers. “I think they are looking for an opening, someone to take advantage of.”
Knapp said he’s toured, as part of an association of small utilities, several data centers in Grant County. In those visits, he learned that the data centers often failed to deliver on promises or simply went around local governments.
“It’s a big game for the big boys,” Knapp said. “The bottom line is, we are not going to let our ratepayers get harmed.”
Deane Osterman, executive director of natural resources for the Kalispel Tribe of Indians, said he’s learned from others that Merkle Standard has sought studies to increase power to the site.
Merkle Standard officials have not reached out to the tribe, which is a neighbor, for consultation or comment, he said.
“I don’t know what kind of data center they are trying to bring in. There is no information on this. It’s hard to even comment,” he said.
Allrise Capital, which owns Merkle Standard, outbid the tribe for the mill when it was sold at bankruptcy auction.
“We understood what the papermill did. We didn’t particularly like it, but we understood it,” Osterman said.
The plans for the data center raise more questions than answers, he said.
“We don’t understand what kind of chemicals they would have, what emissions they would have, how they would manage their waste water, the whole nine yards,” Osterman said.
Monty Stahl, managing director and chief operating officer of Merkle Standard, did not immediately return phone messages and emails seeking comment last week.
Papermill promises
When Allrise Capital outbid the Kalispel Tribe for the papermill, officials immediately said they hoped to restart the mill, hire back most of the workers and wanted to dabble in cryptocurrency mining.
But the promised restart and the return of 140 jobs never materialized at the 927-acre property, which consists of 29 buildings and storage facilities.
Former Allrise CEO Ruslan Zinurov, a Russian-born businessman who became a U.S. citizen, immediately began promoting the mill as a potential cryptocurrency mining giant that eventually could use 600 megawatts of power. Such a power load would have been about two-thirds of the electricity used annually by all of Spokane County.
“Up until they auctioned off the print mill equipment (in 2025), they were promising all these jobs were coming back,” said Rosencrantz, the county commissioner. “Data centers don’t create jobs. Then they fail, and the community is left holding the bag.”
Rosencrantz is up for election in November. He is facing Brandy Warren, whose husband, according to election records, works as a manager at Merkle Standard, the company trying to convert its operation into a data center.
Efforts to reach Warren last week were not immediately successful.
But Rosencrantz said voters can make their own assumptions about how Warren will vote if she is elected to the commission and any approval decisions come before her.
Rosencrantz’s colleague, Commissioner John Gentle, openly supported Merkle Standard in the past.
Gentle once attended a public hearing of the PUD board where he lobbied to provide more power for Merkle Standard’s operations.
Gentle did not respond last week to an interview request. Gentle’s wife, Kimberly Gentle, works in the power industry.
When Allrise Capital submitted a conditional use permit with the county in November 2022 to operate as a cryptocurrency mining operation, Kimberly Gentle was working with Northern Data AG, a company that at the time was one of the largest cryptocurrency mining operations in the world.
In November 2022, Kimberly Gentle was in Stanton, Nebraska, lobbying for a $20 million “cloudbased computing” center on 40 acres near a Nebraska Public Power District substation.
Kimberly Gentle now works as chief power supply officer at Inland Power & Light Co.
When John Gentle was asked in 2022 if he considered it a conflict of interest for him to help decide on a conditional use permit for Merkle Standard’s operation in Usk while his wife worked for another cryptocurrency company, he said no because they were two different companies.
“There is nothing suspicious. There is nothing unethical. There is nothing law-breaking,” John Gentle said in 2022. “We are good people doing good things. That’s the long and short of it.”
Data center politics
The politics behind data centers continues to sour as communities who once welcomed the developments are now complaining about noise, emissions, water usage and the massive electrical needs.
According to the Washington Post, state legislatures so far in 2026 have proposed 375 pieces of legislation related to data centers. That total, as of earlier this month, exceeded the number of bills proposed in the previous three years combined.
And about three-quarters of those bills in 2026 seek to restrict data centers in some way.
In Spokane County, a current proposal is being supported by County Commissioner Al French that seeks to build a data center on the West Plains that could eventually use up to 1,000 megawatts of power, which is more power than is currently used by all residential and commercial uses in Spokane County.
While that would dwarf the proposed 225 megawatts sought by Merkle Standard, Rosencrantz said it could have detrimental effects on Usk, home to a few hundred people.
“The unintended consequences of data centers can be significant,” Rosencrantz said. “I’ve had a number of conversations with landowners right along the distribution line who are getting calls all the time from data center developers.
“I do not want Pend Oreille County to become a data center corridor and sacrifice our quality of life and the beautiful vistas that we currently enjoy.”
And it remains an open question whether Merkle Standard can operate a data center under the conditional use permit it secured to operate the computer servers used to mine cryptocurrency.
“It may be a permitted use,” Rosencrantz acknowledged. “When advocates for data centers come to town, they make the case that impacts will be light. But once the data center is in there, there isn’t anything the community can do about it.”
PUD Commissioner Dave Rick said the utility district has been consistent in the past that any large-load customer seeking more power than the grid can handle must first pay for the upgrades to get that electricity.
But beyond that, the PUD commissioners are limited in what they can decline.
“We simply try to sell utility services at a great price,” Rick said. “I’ve never heard of any potential business coming to a PUD or any utility and them saying, ‘We won’t sell you power because we disagree with your business model,’” he said.
As for the available power, Rick acknowledged that utilities are getting inundated with requests for the limited amount of electricity that currently can be generated through dams, wind, solar, natural gas and coal plants.
“The big utilities in the middle of the state, in Douglas, Chelan and Grant counties, have a waiting list of entities that want to relocate there and consume a lot of power,” Rick said. “Those numbers are staggering, how much power is being requested.”
When companies seeking to develop data centers realize they face 10 years to get the power they need, it will cause “spillover to Spokane and Pend Oreille County,” he said. “The price for power is supply and demand. And the supply is stagnant.”
Osterman, of the Kalispel tribe, said that is one of his main concerns, even if a company like Merkle Standard pays $32 million to upgrade the infrastructure to send more power to Pend Oreille County.
“The energy situation in the Pacific Northwest isn’t like what it used to be,” he said. “We have a supply issue with an ever-increasing load. Then data centers put a crimp on any available supply.
“We want to make sure the rate payers are not exposed to the risk. There’s a lot to be worried about.”
