NY City Weighs 18-Month "Moratorium" On Bitcoin-Mining
In upstate-New York, the City of Plattsburgh is moving toward installing a moratorium on commercial cryptocurrency mining operations, amid concerns from the council that it could drain the city's electricity supplies.
The WaterTown Daily Times reports that the problem is that mining for cryptocurrency, such as Bitcoin, absorbs a tremendous amount of energy in generating the virtual currency. Municipal Lighting Department Manager Bill Treacy says there are two mining farms in the city that they know of - one in the former Imperial Mill and one in Skyway Plaza, and there may be some smaller private mining operations in households in the city, he said.
The mining farms in the City of Plattsburgh have cropped up over the past year, officials say; and at times they have used up to 11.2 megawatts of power per month, which can be about 10 percent of the city’s power supply — more than is consumed by Georgia-Pacific, one of the city’s largest users.
This is a problem because, as part of the Municipal Electric Utility Association since the 1950s, the city is allotted a certain amount of inexpensive hydropower generated on the St. Lawrence River.
The cheap power has allowed the city to maintain attractive electric rates for households and businesses for more than half a century.
At one time, the city was touted as having some of the lowest rates in the nation.
But when usage is high, the system is in jeopardy of going over its allotment of inexpensive hydropower.
When that happens, the city must buy much more-expensive power on the open market to supplement its supply, which drives up the cost for consumers, Treacy said.
The hydropower costs 4.92 cents per megawatt hour, compared with 37 cents for alternative power. And that means 'average' Plattsburghians are facing notably higher costs due to the mining operations.
When the city has to purchase more power, its customers see a spike in their monthly bills.
Treacy said the average home will probably see an increase of $30 to $40 or more in their monthly bill.
“People are surprised when their bills are so high because they say that they turn the lights off when it is cold to save energy, but lights don’t really use much power,” he said.
“It’s the electric heat that is costly.”
Read said the moratorium is proposed not only to give the city time to explore the cost impact, but for health and safety factors.