A New Bill Pertaining to Crypto Mining in Upstate New York

One of the biggest challenges of blockchain is mining. One of the things that can be said about cryptocurrencies is that mining requires a huge amount of energy. As time goes by, the computational power required to mine cryptocurrencies are becoming more and more extensive. In fact, it is said that it mining activities can actually power the entire Iceland. Miners try to look for places where they can operate smoothly. Cost of electricity and a cold weather are two of the most important things for mining operations.

For this reason, miners have been looking for a perfect spot where they can have their operations. China and Canada are among top options for miners. But also, recently, Japan as well is getting the attention of cryptocurrency miners.

New York is also one of the places that is looked into by some miners. However, cryptocurrency miners are facing new tariff rates in the state after the city’s State Public Service Commission approved new regulations that pertain to high-density load customers to be placed under an individual service agreement.

Mining and Service Agreement

The electricity bill that was introduced by the PSC for Massena Electric Department simply means that crypto miners along with high-density load customers must apply for a service agreement.

Is this a clampdown on mining-related activities? In fact, it is the total opposite. According to John B. Rhodes, the chairman of the PSC, he stated that this bill tries to get new companies in the region. He said that the “abundance of low-cost electricity in Upstate New York” can potentially “serve the needs of existing customers and to encourage economic development in the region”.

Negative Impact?

The bill was made after the New York Municipal Power Agency (NYMPA) expressed their concern regarding the possible negative impact that crypto miners actually have to local jurisdiction. In March 2018, the commission acted in such a way that electricity was sold at a much higher rate for the crypto mining firms.

But mining presence is something that New York would want to maximize. Masena county received $165 million investment that will launch a cloud-based crypto mining operation. And this operation will employ 150 individuals.

According to the latest announcement: “As a result, the potential exists for Massena to receive significant revenues if new cryptocurrency companies set up shop in the community. If that were to occur, the utility would be required to defer the revenues for the benefit of ratepayers”.

Quebec Raised Their Price

Though there are places where mining companies are welcomed, Quebec in Canada has chosen to take the situation with precaution. In fact, the electricity price for crypto miners has tripled as a result.

Upstate New York is also using hydroelectric power in order to power municipal utilities in the area and to provide low-cost energy to regular consumers.

Plattsburg is one of the cities in upstate New York that forced a moratorium in the entry of crypto mining companies for 18 months. They were only providing electricity at 2.6 cents per kilowatt-hour during that time. On the other hand, Massena citizens pay around 3.9 cents per kilowatt-hour.