Plattsburgh, a small city in New York with a population of less than 20,000, is the first city in the US to ban cryptocurrency mining. According to the city’s mayor, Colin L. Read, the process of mining Bitcoin has consumed 10 percent of the city’s power. He also explained that Plattsburgh’s ability to offer the cheapest electricity – 4.5 cents per kilowatt-hour and not the normal 10 cents other states pay on average – has caused cryptocurrency miners to flock to the city and make it their base of operations. Additionally, Plattsburgh also provides industrial enterprises an incentive that allows such businesses to pay a mere 2 cents for each kilowatt-hour consumed.
The ban was prompted by residents complaining of an increase in their electric bills of up to $200. The city has a monthly allotment of 104 megawatt-hours of electricity. Once the city exceeds this amount, it purchases costly electricity from the open market thus causing a surge in its price. Due to the complaints, the mayor issued a moratorium banning digital currency mining for 18 months. The ban was unanimously voted for by the city council. According to the mayor’s office, the law’s intent was to examine regulations in order to avoid any irreversible changes commercial cryptocurrency mining could cause to the city’s character and direction.
The moratorium’s goal is to give the zoning code department as well as the municipal lighting department ample time to revise regulations in order to regulate the use of electricity for crypto mining. Possible solutions could require miners to pay the overages on Plattsburgh’s power budget or increase electricity cost for crypto mining. The law will be applicable to new crypto mining operations and will not affect companies that are currently doing cryptocurrency mining. The city’s cheap electricity is mainly due to its participation in the building of power-generating dams during the 1950s.