New Tariffs For New York Crypto-miners
The New York Public Service Commission ruled yesterday that municipal power authorities in upstate New York are permitted to charge increased rates to companies mining cryptocurrencies. This comes due to the large amounts of electricity required to mine cryptocurrencies, and was enacted to "level the playing field and prevent local electricity prices for existing residential and business customers from skyrocketing due to the soaring local demand for electricity." Commission Chair, John B. Rhodes further explained:
The New York Municipal Power agency (NYMPA) (an association of 36 municipal power authorities in New York) petitioned the Commission upon concerns the "high-density load customers, such as cryptocurrency companies, were having a negative impact on local power supplies". This region is of interest to cryptocurrency miners due to its low-cost electricity, made available by NYMPA, which distributes power (mainly hydroelectric) to customers at zero profit. It was reported that mining companies' use of electricity is often thousands of times more than the average resident consumes. Because hydroelectric power has a limited supply, a mass increase in regional power use has resulted in greater costs to the small communities, in which these mining companies operate. It is noted that in Plattsburgh, the existence of just two cryptocurrency mining operations, caused the average resident to see an increase of nearly $10 increase in their January electric bill.
Aside from the major increase in electricity demand for these communities, concern comes from the issue of these companies offering few jobs (in relation to other industries requiring similar demand for power), and little to zero capital investment in the communities they occupy. With little invested in their chosen locales, these companies can quickly and easily relocate to similarly-beneficial communities, leaving their previously occupied communities with unpredictable fluctuations in electrical use.
With these concerns accepted, the Commission has come to this conclusion:
If these tariffs had existed in January, the two operating factions in Plattsburgh would have incurred a 60% increase in the cost of their electricity usage, and the citizens' costs would have remained the same. For full disclosure of the decision, please click the link here.
Update: The city of Plattsburgh, NY has imposed an 18 month ban on commercial cryptocurrency mining.