Russian church found out it will pay higher electricity bills for running mining equipment

The outcome of a Russian court case could affect the popular practice of mining in basements and garages. According to a recent court ruling, a church in Irkutsk will have to pay higher electricity bills for installing and operating mining hardware on its premises. Grace, a religious organization in the local evangelical community, took advantage of lower electricity prices available to individual consumers. But the region's power company said they were over-consuming energy and should pay more for electricity.

Churches are mining to get cheaper electricity

Home mining is still common in parts of Eastern Europe where individual consumers and some institutions enjoy preferential and subsidized electricity. But the phenomenon may be affected by the outcome of a court ruling in a case in Russia, a country with a large amount of unused electricity resources. A Protestant church in Irkutsk Oblast, Siberian Federal District, has been charged with mining and required to pay higher electricity prices, like corporate entities and industrial enterprises, due to excessive consumption of electricity.

Grace Evangelical Community claims that it did not use the servers found on its premises for mining. The religious organization had paid higher electricity bills between May and August 2017, but then applied to the court for a refund of the 1.1 million rubles (about $16,600) it was overcharged for. Recently, the Irkutsk Arbitration Court rejected the organization's claim against the local power company Irkutskenergo and ruled that Grace should pay the money.

Russia Today reported that the church was likely using the hardware found to mine cryptocurrencies. Irkutskenergo said that electricity consumption suddenly spiked in May last year and reached 2 million kWh in August. The church's trustees said they needed the energy for heating and printing religious materials, but the judge pointed out that the electricity consumed during the summer period was far greater than what was needed by larger temples and printing houses.

Irkutskenergo inspectors visited Grace and found a room full of servers on the second floor of a building in the evangelical community, and concluded that it was used to mine cryptocurrency. They said the excessive power consumption would affect the power supply of the entire nearby area. The Irkutsk Arbitration Court agreed with their conclusion and ruled that the excessive fees were reasonable. "The plaintiff's Bitcoin mining activities are clearly not religious activities," the court stated.

Illegal mining farm discovered at AvtoVAZ

The church, like many crypto enthusiasts, has been enjoying subsidized electricity prices. In Russia and other countries in the region, individual consumers and non-governmental organizations such as religious organizations have access to cheaper energy. According to Irkutskenergo’s website, these users pay 1.22 rubles per kilowatt-hour during the day and 0.7 rubles per kilowatt-hour at night (about $0.018 and $0.010, respectively).

The court’s decision does seem a bit arbitrary, as the church should still be able to enjoy preferential electricity prices even if it consumes more electricity than usual. Overall, this case may have a negative impact on Russian home mining. Many ordinary Russian families can get low electricity prices and install GPU mining machines in their houses, basements and garages to mine one or two digital currencies. Raising electricity prices may actually encourage illegal mining.

There have been a number of much larger cases of power theft at mining sites. This spring, an illegal Bitcoin mining farm was discovered at an abandoned factory in Orenburg Oblast. Mining equipment was recently found in the control room of one of the assembly plants of Avtovaz, Russia’s largest automaker. An employee had connected this specialized equipment to the factory’s power grid. The hardware, which had been running since November, consumed at least 1.2 million rubles (about $18,170) worth of electricity. If the Russian government cracks down on home mining, expect to find more cases like this.