A small town located in North-east New York has banned the approval of new cryptocurrency mining centers for 18 months. In a meeting on Thursday, the Plattsburg city council unanimously voted to impose the ban.
The mayor’s office claims that the move is meant to preserve natural resources, the health of the city’s residents and the character and direction of the city. According to a CNBC report, the law aims at giving the city time to evaluate a sharp surge in electricity demand that has raised energy bills for residents.
In an interview with the Motherboard, the Plattsburg mayor, Colin Read, said that the city offers the cheapest electricity rates in the US. Residents pay about 4.5 cents per kilowatt-hour while the country’s average is 10 cents. The mayor said,
Plattsburg offers an incentive for industrial enterprises as they only pay 2 cents per kilowatt-hour,
The mayor explained that the cheap electricity has attracted many mining companies whose profits largely rely on cheap electricity. Cyptocurrency mining is power hungry.
A Sharp Rise in Power Bills
Cyptocurrency mining is power hungry and a company like Coinmint, which has the largest mining center in Plattsburg, used about 10 percent of the city’s total power budget in January and February. This has led to massive complaints from the city’s 20,000 residents.
Fortune reports that Mayor Read came up with the moratorium after residents complained of a sharp increase in power bills at the beginning of the month.
I’ve been hearing a lot of complaints that electric bills have gone up by $100 or $200. You can understand why people are upset,
Plattsburg has an allotment of 104 megawatt-hours of electricity per month. In January, it went over the allotment; more electricity had to be bought from the open market, which is expensive – leading to price rises.
The mayor says that the new law will help protect the city’s residents and also preserve Plattsburg’s natural electrical resources.
New York State Public Service Commission Acts
Meanwhile, the New York state Service Commission has stated that electricity costs for high density load customers will increase beginning this month while those of customers using less electricity will normalize. The move is targeting the cryptocurrency mining companies in the state.
A report on CNBC indicates that if the new rates released by the utility commission had been in place in January, the two major cryptocurrency companies in Plattsburg would have seen their electricity bills increase by more than 60 percent.
The move to increase the electricity costs in Plattsburg and New York for cryptocurrency miners may trigger an exodus of the mining companies from the state to other places with cheaper electricity.
Do you think New York is pushing away crypto miners with the new electricity tariffs? Share your thoughts with us in the comments section.