In a recent ruling, the New York State Public Service Commission has allowed upstate municipal power authorities to charge higher electricity rates to cryptocurrency companies.
Cryptocurrency companies require huge amounts of electricity to run a complex software program to mine digital currency. Such companies fall under the category of “high-density load customers” – those which have a maximum demand exceeding 300 kW and a load density exceeding 250 kWh per square foot per year – and do not qualify for economic development assistance.
The ruling comes after the New York Municipal Power Agency (NYMPA) petitioned the commission regarding concerns that high density load customers were having a negative impact on local power supplies. It would help level the playing field and prevent local electricity prices for existing residential and business customers from skyrocketing due to the soaring local demand for electricity.
“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.”
According to NYMPA, there are at least three cryptocurrency companies operating in upstate New York. With the addition of high-density load customers, the amount of supplemental power needed by the systems can go up dramatically, thereby increasing costs to existing customers. To mitigate this impact, the commission will now allow municipal power authorities to create a new tariff focusing on high-density load customers.
“With the Commission’s decision, electricity costs for high-density load customers will increase beginning in March, while costs for non-high-density load customers will return to their previous levels,” the release stated.
