Bitcoin mining forms to get a pushback from a state in New York for trying to profit from Cheap electricity.
For the next year and a half, a small town in northeastern New York has banned the launch of new bitcoin “mining” firms as the state’s public utilities arm stated that municipal authorities could charge higher electricity rates for miners.
Mining is the process of producing cryptocurrencies such as bitcoin, which has increased by 700 percent over the last 12 months to $8,000. The mining process requires a large amount of computing power which makes miners migrate to regions with ultra-low energy costs.
Plattsburg’s council consistently voted to approve an 18-month moratorium on applications or permissions for new commercial cryptocurrency mining operations. The law provides the city time to assess the best way to handle a gush of electricity demand which raised energy bills for residents.
The manager of Plattsburgh’s Municipal Lighting Department. Bill Treacy, said:
“The moratorium allows the City to review its zoning laws and building codes and to update them to include large Bitcoin operations.”
The “high-density load customers” will increase from this month while costs for customers using less electricity will normalize.
The commission release said:
“Had the new rates been in place in January, the two cryptocurrency companies in Plattsburgh would have seen a more than 60 percent increase in their monthly electricity costs.”
This rule was passed in response to a petition from Ney York Power Agency, a consortium of 36 municipal power authorities including of Plattsburgh.
The electricity rate in Plattsburgh as of January 2010 was as low as 2.37 cents per kilowatt-hour for customers using more than 6,000 kilowatt-hours a month as per a document on city’s website. Residents use around 2.55 cents per kilowatt-hour to 4.53 cents.
New York Power Authority trustees, however, approved a conditional 15,000-kilowatt allocation to the data center.