New York Cracks Down on Miners; They’ll Now Have to Pay Higher Electric Rates

Electricity providers are wising up to crypto miners tapping them to do their bidding, and in New York, miners won’t enjoy the same rate as everyone else to do their business.

The New York State Public Service Commission ruled last week that its municipal power authorities can charge higher electricity rates to cryptocurrency companies that require huge amounts of electricity to conduct business.

The ruling came during the same week as Plattsburgh, a small town in upstate New York, banned crypto mining for 18 months after its low electricity rates made it a magnet for crypto miners.

Looking out for the smaller guys
Instead of letting crypto miners consume electricity at the same rates as customers and businesses, New York decided to allow its power companies to charge this group different rates.

In a statement about the ruling, the commissioner, John Rhodes, said it was needed to level the playing field and prevent local electricity prices for existing residential and business customers from skyrocketing due to the soaring local demand for electricity.

“We always welcome and encourage companies to build and grow their businesses in New York. However, we must ensure business customers pay an appropriate price for the electricity they use. This is especially true in small communities with finite amounts of low-cost power available. If we hadn't acted, existing residential and commercial customers in upstate communities served by a municipal power authority would see sharp increases in their utility bills.”

As noted above, Plattsburgh went so far as to pass a law banning crypto mining for 18 months. In addition, it’s one of the cities that petitioned the commission regarding concerns that high-density load customers, such as cryptocurrency companies, were having a negative impact on local power supplies.

It’s a member of the New York Municipal Power Agency (NYMPA), which represents customer-owned municipal electric systems that acquire low-cost power, and distribute the power to customers at no profit.

Way beyond average
In addition to Plattsburgh, the commission found that in recent months, several municipal power authorities have seen an increase in requests for new service from new commercial customers for “disproportionately large amounts of power.”

Those guzzling electricity miners are server farms that are generally devoted to data processing for cryptocurrencies.

The commission found that in some cases, miners account for 33% of the municipal utility’s total load, which it called “an extraordinary amount of power for a single customer to use.”

There are at least three cryptocurrency companies operating in upstate New York, according to NYMPA. Crypto miners could start seeing higher rates by the end of the month.