Grant County, a town located in the US state of Washington, currently hosts a number of cryptocurrency mining operators. These operators migrated to the area because of cheaper electricity costs from the hydroelectric plant in the local region. Operators, however, may be forced to move since the Grant County Public Utility District (PUD) announced at a commission meeting on Aug. 28 that it will increase the cost of electricity for cryptocurrency mining farms over the next few years.
Cost of Electricity for Cryptocurrency Mining to Increase by 50 Percent by 2021
According to the International Business Times, the Grant County PUD announced at a commission meeting the increase in cost for “evolving industries” like cryptocurrency mining. The cost of electricity for cryptocurrency mining will increase by 15 percent and will be effective on April 1, 2019. In 2020, the rate will increase by another 35 percent and by 2021, another 50 percent. The Grant County PUD decided on these rates to ensure that small businesses and residents could continue to enjoy power rates at low costs.
PUD Commissioner Tom Flint said at the meeting, addressing a large number of cryptocurrency miners who were present:
“Your industry is unregulated and high-risk. This is the best way to ensure our ratepayers are not impacted by this unregulated, high-risk business.”
The Grant County PUD mentioned that the cryptocurrency miners are currently placing a strong strain on the local energy grid. The county has even had inquiries from cryptocurrency miners with extremely high energy requirements, almost three times the amount of power that is needed for local necessities. The rate hike and price increases should, however, balance out the incoming demand from cryptocurrency miners.
Jeremy Nolan, Grant County’s PUD financial analyst, mentioned to the commissioners that the staff preferred a gradual increase in electricity rates over the next three years to other options presented. The gradual shift limits the rate shock for the cryptocurrency firms currently residing in the area. It also provides the Grant County PUD staff additional time to see how future cryptocurrency mining industry customers are going to react and respond to the increase in rates.
Commissioner Larry Schaapman said at the Commission meeting:
“I don’t view miners as villains. You have likened yourselves to the data centers, but you can only do one thing — mine Bitcoin.”
Like Grant County, utility regulators in Chelan County expressed concern about the high energy levels required from cryptocurrency mining farms. Forbes mentioned in March that Chelan County in Washington suspended applications for cryptocurrency farms after reviewing the sheer electricity usage required.
Bitcoin Mining Experiences a Backlash From Electric Utilities and Small Towns
Utility companies also stated that they have to increase capacity at certain substations to meet the needs and requirements from cryptocurrency miners. This increases the overall operating costs for electric utilities but without the guarantee that mining will continue for a long time. The power demands of cryptocurrency mining can easily overwhelm a small town’s electric grid capacity.
Some cryptocurrency miners have, however, decided to build their own electricity infrastructure. Motherboard reported in August that Canada-based cryptocurrency mining company DMG Blockchain is currently building its own electrical substation to support its cryptocurrency farm.