Residents of an upstate New York town are concerned about the energy consumption of cryptocurrency miners, and council has responded with a moratorium on new applications.
A town in New York has banned new cryptocurrency miners from operating for the next 18 months, as residents complain of sky-rocketing electricity bills.
Plattsburgh, which is situated close to the Canadian border, is known for its cheap energy rates (4.5 cents per kilowatt-hour compared with the national average of 10 cents), but in December and January its monthly hydropower allotments were exceeded, leaving residents with inflated bills.
This has occurred because Plattsburgh last year enticed a hoard of cryptocurrency miners to set up shop there with the offer of a further 2 cents per kilowatt-hour discount for industrial enterprises.
Local lawmakers underestimated the energy usage of commercial crypto-mining, and now the Common Council has enacted an 18-month moratorium on all new operations as it considers its next move. Those already operating in the city will be unaffected by the temporary shut-out.
According to Motherboard, Coinmint operates the biggest Bitcoin mining operation in Plattsburgh, and it used about 10% of the city’s entire power budget in January and February.
During the public hearing last Thursday, one resident said that the higher bills were an unfair burden, saying: “The electrical ratepayers should be compensated for this. We shouldn’t be taxed, we shouldn’t be burdened by this.”
In some cases, residents are being slugged with extra costs as high as $300, because additional power needs to be bought from the open market, and that can be up to seven times steeper.
According to Bloomberg, there are also concerns about the impact on the lakeside city’s natural resources, the health of its residents, and the “character and direction” of the city.
Anyone who violates the suspension will owe Plattsburgh up to $1,000 a day for each day they are in operation.
The 18 months is not set in concrete, with councillors hoping to shorten the moratorium once rules are established to “stop the bleeding”, as councillor Patrick McFarlin put it.
“Our public doesn’t deserve 18 months, our public doesn’t deserve waiting even six months for us to get our act together and manage this, but something needs to be done right now and right now 18 months is what we’ve got,” McFarlin continued.
“But the clearly the law says we as a council can act, and if we do act, the moratorium won’t last anywhere near 18 months.”
Canada appeals to crypto-mining operators
Global crypto-miners are searching for sites about 300km north of Plattsburgh in Quebec, Canada.
The energy-rich province has caught the eye of mining farm operators, particularly from China, where the government is cracking down on everything crypto-related.
A Reuters report in January, revealed that Hydro Quebec — Canada’s largest utility — has had to review its commercial energy strategy because it would not have had the long-term capacity to meet the demand of the potential influx of miners.
“We are receiving dozens of demands each day. This context is prompting us to clearly define our strategy,” said Hydro Quebec spokesman Marc-Antoine Pouliot.
“We won’t be able to power all the projects that we’re receiving,” he said, while stressing that Hydro Quebec is not automatically refusing entrepreneurs. “This is evolving very rapidly so we have to be prudent.”