Authorities in New York allowed to increase the cost of electricity for miners

Today it became known that the authorities of New York were allowed, if necessary, to increase the cost of electrical energy for miners. It is not so much about individuals, but about companies engaged in the cryptocurrency sphere, who spend huge amounts of electrical energy in an effort to crypto cryptocurrency, good and different. According to officials, this step is necessary in order to protect local residents and companies that have no relation to cryptocurrency from rising electricity prices.

“We welcome companies that plan to open their business here and develop it. But we have to be sure that business representatives pay the correct price for the electricity they use. This is especially true for small communities where low-cost electricity is limited. If nothing is done, then ordinary people and companies that have no relation to cryptocurrency will see a significant increase in the cost of energy, ”the authorities said.

The decision was made after the power companies turned to the authorities, who noticed a significant increase in electricity consumption by some customers. Electricity consumed so much that it affected the capabilities of the companies themselves - they are simply not able to provide cheap energy to all who need it, in the right amounts. This, first of all, is about low-cost electricity produced by hydroelectric power plants. The increase in energy consumption is not just very noticeable - some customers have begun to consume electricity thousands of times more than the average customer needs.
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As a result, energy companies have to raise prices for everyone. On average, this costs customers $ 10, which are added to a regular invoice. It is so much increased the bills of consumers of electricity provided by utilities in Pittsburgh, New York. The management of energy companies began to send inquiries to municipal authorities, pointing out the need to take into account disproportions in the consumption of electricity by various customers with changes in tariff rates for consumers of different levels.

Prices are rising because there is not enough local supply of electricity produced by hydropower plants, so energy has to be bought on the spot market, and here prices are higher than usual several dozen times. Well, since the local municipality solves the problem of shortage, then you have to pay from the city budget. In order for the state treasury not to become empty, the difference between ordinary electricity tariffs and elevated spot tariffs is evenly divided between all state energy consumers. Naturally, locals and businesses are unhappy - they have to pay more, all other things being equal, including the former volumes of energy consumption by non-miners.

It is clear that crypto companies are trying to look for locations with inexpensive energy tariffs, in order to reduce the cost of mining and increase profits. But there are few such locations in the US, and after the start of the mining farms, energy deficit immediately becomes noticeable. In some cases we are talking about the consumption of one third of the total energy produced in the region by miners.

There are three crypto companies in the state of New York that actively use mining. Their activity leads, as mentioned above, to an energy shortage and to the fact that energy companies have to look for ways to increase the supply of electricity. State officials heard locals and business representatives. Already this month the energy consumption tariff will be raised for miners. But ordinary customers of energy companies will no longer receive increased bills. Tariffs for miners will be raised by about 60%.

By the way, in the same Pittsburgh, New York, banned mining of cryptocurrencies for companies that are not residents of the state. True, the moratorium was imposed not on always, but on 18 months. During this period, the state will not be able to open new miner farms. As mentioned above, the state has relatively inexpensive energy due to hydroelectric power plants. These tariffs attracted miners, but state authorities decided that the local energy companies simply did not pull out all the customers.

As it was already reported on Geektimes, before taking a new order, public hearings took place in the state, after which the decision to ban was made. The problem is that miners who built two farms began to consume more electricity than the Georgia-Pacific pulp and paper mill.