Bitcoin mining farms cause residents' electricity bills to increase, and the government begins to differentiate electricity prices

Cryptocurrency has affected an old industry: electricity. If your neighbor opened a Bitcoin mining factory, it seemed harmless, but at the end of the month, he found that the electricity bill increased by 50 dollars. Residents in some parts of New York State have encountered this problem. At present, the government has ruled that the mining farm needs to pay higher electricity bills than residents.

The New York State Public Service Commission (PSC) recently ruled that municipal power companies can charge cryptocurrency mines higher electricity rates than residential electricity. Because New York State has a large amount of power generated by hydropower stations, this type of electricity is cheaper than other power markets due to cost reasons, and more and more cryptocurrency mines are operating locally. For example, a cryptocurrency mine in Akron asked the local power department to increase the power load by 5MW to meet the power demand of the mine. The original local power demand was small, and this 5MW was equivalent to 33% of the existing power load, which would directly increase the local power cost by 54%.

Cryptocurrency mining farms generally have a large number of racks with thousands of graphics cards, CPUs or computing cards installed, which run at full capacity day and night and "produce" cryptocurrencies with the help of electricity.

In Plattsburgh, due to the operation of two cryptocurrency mining farms there, household electricity bills rose by $10 in January this year. $10 electricity bill is a big number for American families. According to statistics from the U.S. Energy Information Administration, the average residential electricity price in the United States in December 2017 was 12.5 cents, and the average industrial electricity price was 6.63 cents. The average monthly electricity consumption of each household in the United States was 897 degrees, which is basically equivalent to a 10% increase in consumption.

In other industries, it is common for companies to chase low electricity prices. For example, the electrolytic aluminum industry consumes a lot of electricity. The oldest factory of Alcoa is built in Massena, New York, where hydropower is well developed. Other factories are located in North Carolina, Tennessee and other places, all of which are areas with low electricity prices.

But unlike aluminum production, which is encouraged by the government, the cryptocurrency industry has no way to contribute more taxes to the local area. In fact, cryptocurrency is not a commodity and there is currently no law to collect taxes on it. At the same time, it does not require much manpower to maintain and does not create jobs.

According to the ruling of the New York State Public Service Commission, under the new charging plan, local cryptocurrency companies' electricity bills will surge by 60% to balance the electricity prices of other local residential users.

In China, cryptocurrency mines were once chasing low electricity prices. Many Bitcoin mines were built in Xinjiang, Sichuan, Inner Mongolia and other regions where factory buildings are cheap and electricity prices are favorable for attracting foreign investment. However, as the Chinese government tightens its supervision of cryptocurrencies, some local governments have canceled the electricity price discounts, hoping to curb the production of mines from the source. In January this year, the electricity price of some cryptocurrency mines in Sichuan was raised from 0.4 yuan per kWh to 0.8 yuan per kWh.