Power Rates of Crypto Miners in New York to Increase Starting This MarchMar 19, 2018 at 21:27
The New York State Public Service Commission has allowed power distributors in the state to bill higher electricity rates to cryptocurrency mining firms starting this month.
In a ruling, the agency’s chair, John B. Rhodes noted that upstate municipal power authorities were allowed to charge higher electricity use for cryptocurrency mining businesses citing that the latter’s high demand for electricity does not help in economic development.
“Commission will allow municipal power authorities to create a new tariff focusing on high-density load customers that do not qualify for economic development assistance and have a maximum demand exceeding 300 kW and a load density that exceeds 250 kWh per square foot per year, a usage amount far higher than traditional commercial customers,” the ruling read.
The decision rooted from a petition filed by the New York Municipal Power Agency (NYMPA), consisting of 36 municipal power authorities in the state, who collectively raised concerns that crypto mining is pushing the utility bills of local residents but is not bringing enough economic value in return.
The NYMPA further expressed that while some mining firms in the area make up for 33 percent of the municipal utility load, they “have few associated jobs, and make little to no capital investment in the local community.”
It can be noted that crypto mining is an energy-intensive process as it needs continuous validation of transactions on a blockchain by running processor-intensive computations to generate virtual tokens.
Aside from New York, Plattsburgh City, an area also covered by the NYMPA, is also deliberating whether to stop new bitcoin mining operations in the area for 18 months, citing similar power consumption issues.