New York Cryptocurrency Miners Will Pay a Premium for Electricity
Mining cryptocurrencies like bitcoin from the state of New York will be expensive as power providers are now cleared to charge higher electricity rates for crypto mining companies.
In a judgment [PDF] on Thursday, the New York State Public Service Commission — the state's public utility regulator — has enabled upstate municipal power authorities to charge higher power tariffs for companies from the crypto-mining business with high-density heaps, from March.
An energy-intensive procedure, cryptocurrency mining is a process wherein miners are rewarded with coins for producing blocks of confirmed transactions and adding them to a blockchain using specialized computer chips which draw high amounts of power continually.
The move follows a petition by the New York Municipal Power Agency (NYMPA), a group of 36 municipal power providers in the state, citing concerns of higher power prices for residential and business clients due to soaring demand from crypto-mining businesses. 'The addition of high-density load customers can drastically increase the amount of supplemental energy needed by the systems and significantly increases costs to existing customers,' an excerpt from the statement read.
The petition also argued that cryptocurrency miners 'don't bring the financial development traditionally associated with similar load-sized companies' with fewer jobs and 'little to no capital investment' among the local community.
In certain instances of electricity consumption, the cryptocurrency mining companies accounted for a third of the local electricity provider's total load, the announcement said, comparing it to «a large paper manufacturer, which might employ hundreds of workers, utilizes approximately one-fourth the quantity of power on a per square foot basis these high-density load clients.»
The regulator announced:
[T] he Commission will allow municipal power authorities to make a new tariff focusing on high-density load customers that don't qualify for economic development assistance and have a maximum demand exceeding 300 kW and a load rate that exceeds 250 kWh per square foot each year, a use amount far higher than traditional commercial customers.