Bitcoin Miners Can Now Be Charged Extra for Electricity, New York Power Authorities Say
The New York state Public Service Commission has ruled that power companies can charge higher rates to cryptocurrency mining operations, which have moved into the state’s north to take advantage of low-cost hydropower.
The ruling, reported by industry news site Utility Dive, was announced on Thursday. The New York Public Service Commission said the decision was needed “to prevent local electricity prices for existing residential and business customers from skyrocketing.” According to the commission, cryptocurrency mining operations can use “thousands of times” more than an average residential customer, and in some cases account for 33 percent of municipal utilities’ total demand, without commensurate local economic benefits.
Cryptocurrency mining consumes huge amounts of electricity to power servers which solve complex math equations, recently raising environmental concerns. This “proof of work” process is part of the security structure of digital currencies like Bitcoin.
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The New York decision came as one of the affected towns, Plattsburgh, temporarily banned new Bitcoin mining operations. Plattsburgh residents had seen their electric bills surge as rising total demand forced the purchase of more expensive, non-hydropower electricity.
As Ars Technica points out, arbitraging cheap power is a widespread business tactic in industries as diverse as aluminum production and marijuana cultivation. China became a hub of Bitcoin mining in part because of cheap hydropower there, but power authorities there also moved to cut off supplies to cryptocurrency operations last November.