New York Town Bans Commercial Cryptocurrency Mining After It Torches Its Entire Power Budget

For gamers, the rise in cryptocurrency mining means that the hot graphics cards that we'd like to get our hands are hard to find and often priced through the roof. However, not everyone needs a graphics card. But electricity on the other hand; modern civilizations depend on it for everyday life.

In the case of Plattsburgh, at least one commercial cryptocurrency mining operation setup shop within the city limits in an old paper mill. The city was primarily targeted due to its relatively low utility rates (4.5 cents per kWh), and because racks and racks of systems would be running 24-7 consuming an immense amount of energy, any savings on utility rates turns into increased profit potential. What's even more appealing for commercial Bitcoin miners is that they qualify as industrial enterprises, affording them a bargain rate of 2 cents per kWh.

Unfortunately for Plattsburgh residents, the commercial Bitcoin mining boom is ravaging the city's power resources. According to Mayor Colin Read, mines operating in the city sucked up roughly 10 percent of the entire town's power resources during the first two months of 2018.

This increased demand means that Plattsburgh has to purchase more power at a higher rate. Those higher rates, of course, are passed on to the residents and businesses. “I’ve been hearing a lot of complaints that electric bills have gone up by $100 or $200,” said Mayor Read in an interview with Motherboard. “You can understand why people are upset.”

What's compounding the rate hikes is that residents already are paying higher rates due to seasonal demand. “Bitcoin mining operations are adding on top of that, so we have to buy more power—definitely this year we’ve had to buy a lot more power,” Municipal Lighting Department manager Bill Treacy. “My system only has a certain amount of capacity in it, and if they use that capacity then I’m going to have millions of dollars upgrading.”

Mayor Read proposed legislation earlier this month that would "impose a moratorium on applications or proceedings, or the issuance of approvals or permits for commercial cryptocurrency mining operations in the City of Plattsburgh." Last night, the city council voted unanimously to enact the 18-month moratorium on cryptocurrency mining.

Unfortunately for residents, the cryptocurrency mining ban only affects new companies that wish to setup shop in the city. Existing operations, like those run by Bowman, are free to go on with "regularly scheduled programming", which means that residents could still be subject to shockingly high utility bills on a month-to-month basis.

During this 18-month cooling off period, the Plattsburgh officials are hoping to work with cryptocurrency miners on a solution to the monstrous power consumption, perhaps working out a deal where miners will pay for their excess usage or pay a higher utility rate.