Plattsburgh First U.S. City To Ban Bitcoin Mining On Excessive Power Use
Plattsburgh, a New York city, has imposed an 18-month moratorium on Bitcoin mining to prevent excessive consumption of the city’s cheap electricity by miners, becoming the first city in the US to ban cryptocurrency mining.
Plattsburgh’s Common Council unanimously voted to impose the ban at a meeting Thursday night after the Municipal Lighting Department found the mining farms in the city consume around 10 percent of the total power supply, forcing the city to buy more electricity at a much higher price.
A normal Plattsburgh household uses 4,000 to 5,000 kilowatt hours per month.
Cryptocurrency mining employs several computers at a single location called farms, and they continuously solve algorithms to generate new bitcoins. The mining process consumes lot of power and generates heat.
The Bitcoin moratorium was proposed by Plattsburgh Mayor Colin Read earlier this month after local residents began reporting wildly inflated electricity bills in January.
According to Read, Plattsburgh has the cheapest electricity in the world. Residents pay about 4.5 cents per kilowatt-hour, compared to 10 cents the rest of the country pays on average. Plattsburgh also has a subsidy rate of 2 cents per KWH for industrial enterprises, which the cryptocurrency miners take advantage of.
But the problem is that Plattsburgh, which only has an allotment of 104 megawatt-hours of electricity per month, exceeded its limit and consumed 122 MW.
When the consumption was exceeded, the Council was forced to purchase electricity on the open market for far higher prices, and the cost fell on the city’s residents.
The moratorium affects only new commercial Bitcoin operations and will not affect companies that are already mining in the city.
In the next 18 months, city officials pledged to work with citizens and local Bitcoin miners to develop a solution to Plattsburgh’s energy problem.
The City Council decision followed a ruling by the New York State Public Service Commission that upstate municipal power authorities could charge higher electricity rates to cryptocurrency companies that require huge amounts of electricity to conduct business.
The New York Municipal Power Agency (NYMPA) petitioned the Commission regarding concerns that high density load customers, such as cryptocurrency companies, were having a negative impact on local power supplies.
New York PSC said that 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.
by RTT Staff Writer
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