The New York State Public Service Commission said on Thursday, March 15 that upstate municipal power providers are now allowed to charge higher rates to cryptocurrency miners. The reason should be obvious: Companies and individuals digging for digital gold are consuming large amounts of power, which takes a toll on local power companies distributing electricity to residential homes and businesses. Thus, instead of raising everyone’s rates to fight the surge, companies can now single out miners.
The New York Municipal Power Agency previously urged the Commission to crack down on “high-load” customers. The Agency serves as a voice for 36 municipal power companies across New York, some of which provide low-cost power via hydropower plants to customers without making a profit. It’s through these hydro-based channels where the impact is felt the most because miners are taking advantage of the low-cost energy.
According to the commission, companies and individuals mining for digital coins are using “thousands of times” more electricity than the average customer. This may go unnoticed in large metropolitan areas, but small communities now face higher monthly payments because power companies need more funds to keep all customers illuminated while also compensating for the miners.
“Cryptocurrency companies generally seek to occupy existing commercial or industrial facilities where they can gain access to the large amounts of power required for their operations,” the Commission states. “As some of these customers have come online, it has become clear that the type of electricity load demand was of a different character than load characteristics typically seen by NYMPA members.”
Cryptocurrency miners, at least the large ones, can’t depend on a single PC. Instead, they build monstrosities with numerous graphics cards stringed to one machine. These machines consume large amounts of power to create digital money and maintain the currency’s platform. Throw numerous mining machines into a building and you have a cryptocurrency mining farm gobbling power each second.
The commission notes that a single cryptocurrency mining “customer” can consume 33 percent of the local power company’s total load. Meanwhile, the agency points out that cryptocurrency companies and individuals don’t provide “capital investment” in the local community as seen with other customers that consume the same power load. They can also pack their bags and move to another area, causing “unpredictable electrical use” and “fluctuations” across the state.
The agency’s current biggest beef appears to target at least three cryptocurrency companies residing in upstate New York. The large power consumption requires supplemental power for residents and other companies, thus driving up cost. This is where the demand comes in to create a new tariff targeting digital coin miners.
“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 commission explains.
The price increase for these customers began this month while costs for everyone else will return to normal. The move arrives after one upstate New York city actually banned Bitcoin mining for 18 months over excessive use of the city’s low-cost power.