On March 15th Plattsburgh's city council held a vote that resulted in an unanimous decision to hold a 18 month moratorium on applications or permits for new cryptocurrency mining operations. The small New York city is looking to prevent mining companies from taking advantage of their cheap electricity costs with excessive consumption. Plattsburgh is known to have cheap electricity due to its close proximity to St. Lawrence river's hydroelectric dam.
There are two major commercial mining companies in Plattsburgh and they are said to consume over 10% of the total power supply. The city is forced to buy more electricity on the open market to meet the demand, which results in higher costs for the city and are passed down to individual consumers.
Earlier in the month Plattsburgh Mayor Colin Read stated consumers have experienced and complained about spikes in their electric bills starting early January. There have been details stating increases by $100-$200 in the past few months. During the Common Council meeting Read proposed the local law that would set the 18 month moratorium on new commercial crypto mining farms looking to set up shop in Plattsburgh.
“The purpose of this is just to allow us some time to explore this issue. We’ve been asked to address this by our Municipal Lighting Division. Increasingly now with the great use of additional power we are put over our threshold each winter and when we’re put over our threshold the ratepayers of the city of Plattsburgh do pay a higher electric rate as a consequence. So we want to explore these various issues, understand the effects on our ratepayers, find if there’s a Public Service’s Commission solution to this and we need a little bit of time to explore that.” -Plattsburgh Mayor Read
In an initial step to help curb the increase costs, The New York State Public Service Commission has said "high-density load customers" will need to pay more for electricity, while costs for the average consumer will normalize back to before the price spikes early this year. The City Council has agreed to the cost increase for mining companies and have made it clear, this is not an attack on crypto mining companies, but a way to find a solution that's more cost efficient for everyone involved.
During the 18 month moratorium, city officials will work with citizens and local Bitcoin mining farms to develop a solution to the energy cost issues. Local miners have reported to Vice that while they are not happy with the year and half moratorium, they are willing to work with the city in finding a solution.
Plattsburgh's 18 month moratorium decision has been the first of its kind when it comes to regulation of cryptomining in the United States. It would not be surprising if other states follow suit in the future.
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