The New York Public Service Commission (PSC) has released a ruling that allows power companies to charge cryptocurrency miners with higher electricity rates. The move aims to halt electricity prices from drastically increasing due to the massive amounts of power required to mine cryptocurrency. The commission claims that cryptocurrency mining harnesses “thousands of times” more energy than an average residential user. It also makes up “33 percent of municipal utilities’ total demand” without bringing any equivalent benefits to the local economy.
The process of mining cryptocurrency demands large amounts of electricity to servers that compute complicated math equations – one of the process digital currencies require as “proof of work”. The additional electric charge imposed by the New York PSC was prompted by residents of Plattsburgh, New York who complained of an increase in their power bills. The rise in their electric bills was due to the number of cryptocurrency mining operations located in the city, all of which were taking advantage of the area’s cheap electricity rates.
Since cryptocurrency mining offers locals with little job prospects, nor does it demand the building of factories, the New York PSC saw the possibility of crypto miners easily moving their facilities to a different location thereby leaving the locality with the high likelihood of electrical fluctuations. Customers who consume more than 250kWh for each square foot every year will be charged with a rate increase by municipal power authorities, as they are authorized to do so by the New York PSC. A similar case was evident in Colorado when marijuana growers were slapped with an additional $0.0216 per kWh due to the electricity required to maintain ventilation systems, lights, and air conditioners for the marijuana plants.