By Alejandro Jimenez
Plattsburgh bans mining operations
Plattsburgh, NY, has one of the lowest electricity rates in the United States. While the US average is 10.27 cents/kWh and the New York state average is 14.47 cents/kWh, Plattsburgh residents enjoy a rate of 4.36 cents/kWh due to the city’s proximity to a hydroelectric dam on the St. Lawrence River. The rate is even more attractive for industrial operations- 2.61 cents/kWh.
While this rate was meant to bring industries and factories to the city, according to Mayor Colin Read, it has also inadvertently attracted cryptocurrency miners to the area. The spike in energy usage by these miners has caused electricity bills around the city to rise.
“In our case, Plattsburgh has a set amount of cheap electricity and if it goes above that, everyone in the city has to pay more,” David Bowman, Founder and CEO of Plattsburgh BTC, a mining company based in Plattsburgh, wrote to Motherboard. As a city, Plattsburgh has an allotment of 104 megawatts of electricity at the cheaper rates. If the city goes over this limit, it needs to buy more electricity on the open market. This additional cost is spread among the residents, leading to higher electricity bills. The fact that mining operations use so much electricity has made them an easy target for lawmakers to pass restrictions. The largest bitcoin mining operation in Plattsburgh, run by Coinmint from Puerto Rico, used about 10% of Plattsburgh’s allotment in January and February.
Mayor Read proposed a moratorium on new bitcoin and crytptocurrency mining operations on March 1. The city council unanimously voted to impose the 18-month moratorium on the evening of March 15. The moratorium is meant to give the city council time to develop a solution for the energy problem exacerbated by mining operations. Council members are optimistic that the ban won’t last the full 18 months, however. Councilor Patrick McFarlin, on the length of time for the ban, says, "Our public doesn't deserve 18 months, our public doesn't deserve waiting even six months for us to get our act together and manage this, but something needs to be done right now and right now 18 months is what we've got. But clearly the law says we as a council can act, and if we do act, the moratorium won't last anywhere near 18 months."
Over the coming months, city officials will be working alongside residents and the mining operations to develop an equitable solution. Mayor Read has suggested possibly having the miners pay for overages of the power allotment or charging miners a higher kWh rate.
“It would never cost the Plattsburgh citizens any more money to let more miners come in here because the miners are willing to pay for those overages when it's super cold,” Tom Pillsworth, a Plattsburgh local and partner at Plattsburgh BTC, told Motherboard. “The miners are more than willing to pay.”