10% of Grid at Risk: 85 MW AI Data Centre Evades B.C.’s New Energy Curbs

This isn't just about one community—it's a microcosm of the tension between AI expansion and clean energy goals. Will B.C. let FortisBC become the back door for unchecked data centre growth, putting water resources and grid stability on the line?

British Columbia's attempt to rein in power-hungry data centres is facing its first major stress test in the scenic community of Christina Lake, where DMG Blockchain Solutions is quietly ramping up an AI facility that will draw as much as 85 megawatts—more than 10 per cent of the total capacity of the FortisBC grid. The expansion, which was not communicated to the Regional District of Kootenay Boundary, has exposed a regulatory fissure: while BC Hydro's service territory is now subject to competitive bidding for large electricity connections, the province's second major utility, FortisBC, falls outside that regime. The result is a potential flood of data centre development in southeastern B.C. that could undermine both local democracy and the province's energy planning.

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If FortisBC continues to operate outside the provincial framework, it may attract a wave of similar projects seeking to avoid the BC Hydro lottery.

The story begins in 2018, when DMG converted an abandoned finger-joint plant near the U.S. border into a cryptocurrency mining operation drawing 15 megawatts. In 2022, after a public hearing, the regional district amended the site's zoning to permit 'data warehousing'—a deliberately broad term that encompasses both crypto mining and AI hosting. At the time, the power consumption was modest. But in mid-2026, construction activity and a company news release revealed a staggering increase: DMG was retrofitting the facility for AI workloads, and its power demand would quadruple to 65 megawatts, with the potential to reach 85 megawatts via its dedicated substation. That would represent more than one-tenth of FortisBC's entire grid capacity, raising immediate questions about grid reliability, local water supplies, and the lack of transparency.

Grace McGregor, the Area C director for the regional district, only learned of the plan through the press release. 'I’m not against data centres,' she told reporters. 'What I am against is that nobody lets you know what’s going on.' Her office has been fielding complaints from residents worried about the environmental impact and the strain on infrastructure. Water use is a particular concern for AI data centres, which often require evaporative cooling systems that consume large volumes of freshwater—a sensitive issue in the arid Kootenays.

The controversy highlights a structural gap in B.C.’s electricity governance. In early 2026, the provincial government introduced rules forcing large-scale energy users to bid for access to BC Hydro’s grid, effectively capping supply for new data centres unless they meet strict criteria. But FortisBC, an investor-owned utility serving the Kootenays and Southern Interior, is not bound by those rules. While the province has some regulatory authority over Fortis through the British Columbia Utilities Commission, the political decision to exempt it from the bidding framework was likely intended to avoid disrupting existing service territories. Instead, it has created an arbitrage opportunity for developers like DMG.

From a market perspective, DMG's stock (listed on the TSX Venture Exchange as DMGI) has been battered by the crypto downturn, and the pivot to AI hosting is an attempt to use its existing power contracts and site to capture the booming demand for GPU compute. However, the secrecy surrounding the expansion could backfire if the public backlash forces FortisBC or the province to intervene retroactively. Fortis Inc. (FTS), the parent company, faces reputational risk as it balances the interests of ratepayers and large industrial customers.

The zoning permission from 2022 may technically cover the new use, but the sheer scale of the increase—from 15 to as much as 85 megawatts—was never publicly debated. This raises questions about whether the spirit of local consultation has been violated. Some legal experts argue that a material change in usage intensity could trigger a requirement for a new public hearing, though the RDKB has not yet taken that step.