There is little doubt that cryptocurrency mining is extremely power intensive, with particular emphasis on coins that still rely on the Proof-of-Work (PoW) consensus mechanism. Recognizing this, Washington State’s Chelan County Public Utility District (PUD) has proposed a rate hike for mining enterprises within the region. The county is currently awaiting comments to be submitted, before enacting the hike.
Chelan County Reviews Proposed Tariffs for Cryptocurrencies
According to data from Digiconomist, at 73 TWh annually, Bitcoin mining alone consumes more electricity than entire countries, including Austria and Czech Republic. More specifically, 24.5 U.S. households can be powered for one day with the amount of electricity consumed per Bitcoin transactions. Given that there are currently over 2,000 cryptocurrencies available, the total consumption figures are almost guaranteed to be significantly higher.
The County’s PUD, which is responsible for water, electricity, telecommunications, and wastewater public utilities in the Chelan County, has proposed new rates that capture the increased fixed and variable costs associated with crypto mining activities. According to the Chelan PUD, cryptocurrency mining services required power in excess of 200 MW, exceeding the county’s capacity. Since the demand exceeds what energy and customer providers are able to supply, simple economics dictates that miners will simply have to pay more to run their businesses.
Local publication KPQ quoted Chelan PUD’s Public Information Officer, Kimberlee Craig, who said, “Chelan PUD is addressing (the rate structure) in a way that captures the cost and protects the investment for the customers that are already here and invested greatly in our system.”
What Does Schedule 36 Say?
During a public information meeting on November 7, 2018, Schedule 36 was presented to local businesses engaged in cryptocurrency mining. Excerpts from their presentation read:
“This Schedule applies to any customer involved in computing or data processing load related to cryptocurrency mining, Bitcoin, blockchain, proof-of-work or other loads having, in the District’s determination, similar characteristics including any of the following: high energy use density, high load factor, need for more than routine alterations to the District’s Electric Service Facilities in order to maintain safety, load that is portable and distributable, highly variable load growth or load reduction as an individual customer and/or in aggregate with similar customers in the District’s service area.”
Members of the local mining community, however, were quick to express their displeasure at the decision to increase costs. While the PUD has invited public discussion before the rate hike is implemented, local miners believe that not much can be done to change the authorities’ viewpoint.
Denton Meier, owner of mining company Silicon Orchard, told KPQ, “Looking at it in a bigger picture it’s not just mining but services that can happen around that. Like jobs creation in programming, finance, and other things that will happen over time with the cryptocurrency market.”
Nevertheless, the Chelan County PUD seems confident that these changes have only been implemented after listening to concerns brought up previously. Customer Utilities Rate Adviser Lindsey Mohns said:
“We continue to take into account the feedback we’ve heard from cryptocurrency customers so I would have expected if they we going to drop out they would have already, and not necessarily after this (meeting), because this has really taken some of their feedback into account.”
Keeping a close eye on how events pan out in Chelan, of which BTCManager has already outlined, could also spell out a precedent for how local counties deal with Bitcoin’s mining scene.