Cryptocurrency Companies to See Electric Rates Rise in NY. Opening for Microgrids?
Certain New York utilities can now charge higher rates to cryptocurrency companies, a business sector viewed as ripe for microgrids.
The state Public Service Commission on Thursday ruled (Case No. 18018/18-E-0126) that upstate municipal power authorities may create special rates for the companies, known for their use of vast amounts of energy in bitcoin mining.
The commission is attempting to keep rates from rising for other customers because of the increased demand the cryptocurrency companies place on utility energy supplies.
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“We always welcome and encourage companies to build and grow their businesses in New York,” said John Rhodes, commission chair. “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.
The commission action followed a warning from the New York Municipal Power Agency (NYMPA), an association of 36 municipal power authorities, that their low-cost hydroelectric power was drawing cryptocurrency companies to their territories.
The intensive data processing of cryptocurrency companies requires thousands of times more electricity than an average home uses. Regulators fear that the companies will drain the supply of low-cost hydropower, forcing the small municipal utilities to buy more expensive power to serve its customers.
For example, the Village of Akron in Erie County reported that it faced a 54 percent rise in bulk power costs as the result of a new cryptocurrency company with a 5 MW demand.
Because of their power demand, cryptocurrency companies are viewed as good candidates for microgrids, especially in places where utility grid constraints limit company expansion. It remains to be seen if the higher tariffs in New York will create incentive for the companies to develop microgrids.
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