Can Crypto Miners Increase Your Electricity Bills? Idaho Power says yes. What you should know

Can Crypto Miners Increase Your Electricity Bills?  Idaho Power says yes.  What you should know
Can Crypto Miners Increase Your Electricity Bills?  Idaho Power says yes.  What you should know

BOISE (Idaho Statesman) – Cryptocurrency miners are flocking to Idaho for its cheap power. State authorities say that the extra energy demand puts a burden on the entire electrical grid.

In fact, Idaho Power asked the Idaho Public Utilities Commission to create a new customer class for large-scale crypto miners, said Jordan Rodriguez, an Idaho Power spokesperson.

The new classification was approved in June, according to a PUC spokesperson, but a Puerto Rican cryptomining company called GeoBitmine requested reconsideration. The PUC is now taking comments on the petition.

“These customers have the potential for significant energy demand, which may require Idaho Power to build additional infrastructure,” Rodriguez said by phone.

GeoBitmine said in its motion for reconsideration that the new class of customers is discriminatory and would halt its plans to develop a crypto mining operation at an inactive JR Simplot Co. potato processing plant in Aberdeen which will use waste heat to run year-round greenhouse operations. . A University of Idaho Research and Extension Center planned to use the operation for seed research.

Both crypto mining and indoor farming will use a consistent electrical load of 6 megawatts, the petition states. But GeoBitmine argues that the prices and terms of service that will apply under the new classification “make it impossible to continue” with the joint venture because of potential power outages.

“The loss of electricity during the hottest part of the day in the hottest months of the year would be catastrophic for indoor food production, potato storage and seed research facilities,” the company said.

CRYPTO-MINING COMPANY CALLS CLASSIFICATION DISCRIMINATORY

It also said the classification would force ratepayers to suffer provisions not imposed on any other class of customer in Idaho Power’s system.

“It is black-letter utility law that the Commission cannot approve, and utilities cannot require, rates that treat customers preferentially or to favor some customers over other similarly situated customers,” GeoBitmine said in its petition.

Rodriguez said increased demand stemming from crypto mining could require new substations, lines, transmission assets and power plants. Costs for these assets are paid by all customers through rates over time.

Adding new infrastructure can increase electricity prices for everyone. If the crypto miners were to pack up and leave the state, the remaining costs would remain, and the rest of Idaho Power’s customers would foot the bill.

And with the volatility of the crypto industry, it’s unclear how long these miners will stick around.

“What we don’t want is to have a bunch of speculative load online in a short period of time that would potentially require us to go out and build new resources or buy a bunch of energy to meet the demand,” Rodriguez said.

The new classification for industrial crypto miners will apply to operations drawing less than 20 MW. According to Rodriguez, 20 MW is enough to power around 15,000 homes. Anything larger falls into an existing classification with commission monitoring.

The PUC divides customers into classes based on the way they use electricity, including residential users, small businesses, larger commercial businesses, irrigators and farmers.

Cryptominers run powerful computers that perform complex mathematical equations, often at all times, to mine or create digital currencies.

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ELECTRICITY A BIG COST FOR CRYPTO MINERS

Mike Louis, engineering program manager for the PUC, said electricity is a major cost for any crypto mining operation.

“It’s an incentive for them to hunt for the lowest electricity,” Louis told the Idaho Statesman by phone. “And because they don’t have other infrastructure holding them to this location, typical of other customers, that puts them in a class where there’s a need to protect against stranded assets.”

To date, most crypto miners in the state are hobbyists, operating out of basements or garages, according to Rodriguez. These people would not be affected by the new customer class.

“It’s unlikely for a residential person to do enough mining to make these large impacts that could force us to build additional infrastructure,” Rodriguez said.

Currently, Idaho Power does not have any customers who would fall into the new customer class. Although some customers have crypto mining under residential plans or small general services, he said, Idaho Power can’t say how many. But the utility says it “has received interest from customers proposing approximately 2,000 MW of potential cryptocurrency mining.”

The utility says it has some of the lowest energy prices in the country, about 30% lower than the national average, with variations depending on customer class.

Idaho also has a minimal risk of natural disasters, which could disrupt data centers or other large buildings filled with servers, computers and other equipment.

“It’s seen as a low-risk location to perform these operations,” Rodriguez said. “It’s also a relatively low-cost energy location compared to operating in California.”

Idaho Power is already experiencing an increase in demand thanks to significant population growth over the past decade or so. Excessive heat and fire activity also put a strain on the grid.

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IDAHO POWER WOULD SHUT DOWN CRYPTO MINING DURING PUMPED DEMAND

One of two key parts of the utility’s request to the PUC is the ability to shut down crypto mining during times of high energy demand to avoid shutdowns for Idaho Power’s remaining customer base. Heat waves are the best example of a time when the system is running close to capacity, Rodriguez said.

“It’s something we’re keeping an eye on,” he said.

The other key piece is the authority to charge crypto miners a “marginal rate” for any additional electricity Idaho Power has to buy or generate for them. Marginal interest rates are normally higher than base interest rates.

A report released on September 8, commissioned by the Biden administration, detailed the carbon footprint of digital assets. The report warned that crypto-related electricity use could harm efforts to reduce greenhouse gas emissions.

The US hosts about a third of global crypto operations, according to the report. They use an estimated 0.9% to 1.7% of the country’s electricity consumption.

“Some crypto-asset technologies currently require a significant amount of electricity for asset generation, ownership and exchange,” the report said. “Depending on the energy intensity of the technology used, cryptoassets could impede broader efforts to achieve net-zero carbon pollution consistent with US climate commitments and goals.”

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