The city of Plattsburgh in New York seeks to regulate crypto mining operations to be able to protect its locals’ safety and wallets.
Crypto mining operations need access to inexpensive electricity and most especially colder weather in order to flourish. However, lower electricity cost for crypto miners will mean that non-mining entities like city residents and business establishments will have to shoulder higher tariffs in relation to energy cost. In addition to this, the high level of noise is a huge concern for people living or working in close proximity to mining facilities.
Different courses of action depend upon the jurisdiction. While several authorities think that miners need to pay higher for electricity consumption, other jurisdictions like Ephrata, Washington have issued moratoriums that will put a stop to the approval of new mining operations.
In an October 24 report by the Press-Republican, the city of Plattsburgh, New York thinks that more regulation is needed in the crypto sector. A statement issued by the City of Plattsburgh Common Council indicates:
“The public is well aware that the cryptocurrency industry has been relying heavily on the city’s cheap industrial power rates.”
The need for the tariff is because Plattsburgh’s Municipal Lighting Department (MLD) buys low-cost hydropower from the New York Power Authority on the St. Lawrence River. However, the MLD has to buy additional power on the open market, which is more expensive, once all electricity is all used up. Open market electricity is seven times more costly.
Due to last December’s cryptocurrency boom that lasted until January of this year, MLD consumers need to cough up an additional $300 for their electricity. This has compelled the city to request the Public Service Commission to order crypto mining operators to pay for the surplus power:
“The city, and other similarly concerned municipalities, were successful in petitioning the Public Service Commission to impose a new tariff structure that requires the cryptocurrency industry to pay for the entire amount of electricity quota overages they induce. No longer would other ratepayers have to pay for a problem of the cryptocurrency industry’s creation.”
While still trying to determine the best way to address crypto mining in the city, authorities, such as those in Ephrata, have decided to implement a 12-month moratorium on new mining activities. A commission has been tasked to explore the best solution regarding the issue. The press release clarifies:
“The result of these efforts is a proposed local law which defines this activity, requires fire suppression within a contained structure, imposes heat and noise limits, and enacts zoning changes so that these mines would only be allowed via a special use permit within an industrial zone.”
Said regulations are not intended to impede industry growth. They are meant to discover the best solutions for the cities’ residents. In conclusion, the release states:
“The combination of our petition to the New York State Public Service Commission and these sensible proposals to modify our local laws should protect our citizens and act as a model for other municipalities around the country and the world that are trying to cope with such rapid growth of this industry in their communities.”