Higher Energy Costs for New York State Bitcoin Miners

In a recent press release from the New York state Public Service Commission, they ruled that power companies can charge higher rates to cryptocurrency mining operations. There are at least three cryptocurrency companies operating in upstate New York using 1000’s more TWh than residential customers, with some accounting for 33 percent of municipal utilities’ total demand.

By comparison, a large paper manufacturer, which might employ hundreds of workers, uses roughly one-fourth the amount of electricity on a per square foot basis that these high-density load customers. “We always welcome and encourage companies to build and grow their businesses in New York,” said Commission Chair John B. Rhodes. “However, we must ensure business customers pay an appropriate price for the electricity they use. This is especially true in small communities with finite amounts of low-cost power available. If we hadn’t acted, existing residential and commercial customers in upstate communities served by a municipal power authority would see sharp increases in their utility bills.”

One of the largest costs to Bitcoin mining is the cost of electricity to run the miners 24/7. There has been much discussion regarding this situation and it has been said that the electricity to run Bitcoin globally could run a small country such as Ireland, Serbia or Bahrain. Bitcoin mining consumes the same amount of electricity as Denmark – 33TWh annually, according to one recent report.

World Economic Forum reported that the electricity used in a single Bitcoin transaction, for instance, could power a house for a month.