Despite worries about cryptocurrency mining — from the impact that it can have on the environment to the potential impact it can have on the rates for other local electricity consumers — the state of New York has approved a bid to provide cheaper electricity to miners.
State of Crypto Mining in New York
Yesterday, as reported by Bloomberg, state regulators approved a motion that would create a new rate structure specifically for cryptocurrency miners looking to negotiate a better deal on electricity.
Massena, a town in Upstate New York, will allow its municipal utility to review contracts on an individual basis for miners, which will serve to protect other residents from an increase in rates from grid usage.
The news is surprising as it comes after a decision in March that saw 36 state municipalities increase rates for individuals and firms mining the coins.
Because of the accessibility of cheaper hydro-electric power, New York has become something of a hot spot for mining. Other locales, from Iceland to Quebec to China, are also attracting miners, but locals in these municipalities are concerned that they will soak up low-cost hydropower supplies and raise power bills for everyone. This has left local governments — including New York’s — trying to strike a balance between attracting new business and protecting residents from rising energy costs.
“We must ensure that business customers pay a fair price for the electricity that they consume,” John Rhodes, chair of the New York State Department of Public Service, said in a statement. “However, given the abundance of low-cost electricity in Upstate New York, there is an opportunity to serve the needs of existing customers and to encourage economic development in the region.”
It’s the hydroelectric dams in Upstate New York that have made it possible for municipal utilities to supply power to customers for just pennies per kilowatt-hour. In Massena, for example, residential customers pay about 3.9 cents a kilowatt hour. By comparison, residential electricity rates average about 13 cents nationally.
In March, Plattsburgh, another small city in Upstate New York, became the first to impose a moratorium on the power-hungry cryptocurrency mining operations there for 18 months. Plattsburgh was charging miners an average of 2.6 cents a kilowatt-hour at the time.
In relation, also earlier this year, the New York state Department of Public Service cleared an association of 36 municipal power agencies, including Plattsburgh’s, to charge miners higher rates because of the huge volumes of electricity they use.
Featured image from Shutterstock.
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