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Plattsburgh Puts Its Foot Down On Commercial Cryptomining Operations

The city council of Plattsburgh, New York, unanimously voted for an 18-month moratorium on commercial cryptomining operations so the city could figure out how to manage its limited power resources.

Plattsburgh has a sweet deal going for electricity. The city has an agreement with the local hydroelectric company to provide its citizens and businesses with possibly the most affordable power rates in the country. Residents of Plattsburgh pay on average $0.045 per kWh, whereas most of the country pays upwards of $0.10 per kWh. Plattsburgh also offers dirt cheap electricity to commercial operations, such as factories. Big companies pay as little as $0.02 per kWh.

As you can imagine, the cheap power rates in Plattsburgh have attracted cryptocurrency miners. The city is currently home to two commercial mining operations; one which draws 0.2 megawatts, and another that draws a staggering 11 megawatts.

These big miners are causing problems for the city’s residents and businesses. Unlike most cities, which have access to nearly unlimited volumes of power at the same rate, Plattsburgh’s total community power is limited to 104 megawatts. If the entire power draw for the city remains under 104 megawatts, the rate stays the same. Once the power draw exceeds the city’s quota, the price goes up. For everyone.

The residents of Plattsburgh have for years enjoyed their lower power rates, but for the last two years, the bills have ballooned in the winter because the community is now pulling more than its quota in those months. 

“When we go over the quota, we’re no longer buying power at $4.50 per mWh,” said Colin L. Read, Mayor of Plattsburgh, New York. “Hopefully we’re purchasing power as cheap as $32 per mWh, of something to the order of 7x higher rate. If we go over that power […], we go on the spot market at the very worst times of the year […], and those spot rates can be 50 or 100x the typical rate.”

Plattsburgh’s citizens and business owners have been complaining about the rising cost of electricity, and the city council is motivated to find a solution. In the meantime, the city has passed an 18-month moratorium on new cryptomining businesses while the city council sorts out how to move forward.

“This isn’t because we’re luddites. It isn’t because we’re afraid of cryptocurrency," said Mayor Read. "It’s because we recognize that we have a fixed resource, and unlike some other communities where they can simply buy more power […], we don’t have that. We have 104 megawatts. We’ve got a fixed amount. We have to manage that as a fixed resource.”

The council briefly discussed the possibility of applying for “differential rate” that would relieve the local populace of the surcharge burden. That rate would be somewhere in between the commercial and the residential power rate, and cryptomining operations would fall under the new rate. However, Mayor Read explained that a differential rate would not solve the problem, because the city would still be limited to 104 megawatts of cheap power.

Read also noted that the city would not be able to pass the surcharge burden solely to the miners, even though representatives from the mining operations expressed that they would be willing to shoulder that burden. If the miners draw 15% of the city’s quota, they would be on the hook for 15% of the surcharge.

The moratorium on commercial mining operations is only in effect for companies that aren’t yet established in the community. The two mining facilities that are already in operation are grandfathered in, so they will not be forced to close up shop. The council also noted that there is a clause in the law that would allow for one-off cases that could be approved if the company can prove that it has already moved forward with a substantial investment in equipment or facility construction.

Though the moratorium is set for 18 months, the council expressed concerns that the timeframe is too long. Indeed, nearly every council member agreed that a shorter period would be appropriate. The council ultimately moved forward on the motion because it includes language that would enable the council to drop the moratorium at any time. The members all agreed that moving quickly on this matter is of utmost importance.

  • Giroro
    "$4.50 per mWh"

    Plattsburgh, New York... where it costs $13,500 to charge your phone.
    Reply
  • vern72
    Ha ha ha Giroro! What a difference a capitalize letter can make!
    Reply
  • redgarl
    Power is coming from Quebec and Ontario.
    Reply
  • mrmez
    "...whereas most of the country pays upwards of $0.10 per kWh"
    Wow. Complaining about 10c/Kwh.
    AUS pay ~40-70c/Kwh :/
    Reply
  • Zaporro
    Kiill it with fire, root out these cryptominers like pests.
    Reply
  • cryoburner
    It doesn't sound like they really put their foot down, seeing as the existing large-scale crypto-mining operations are still allowed to operate there, and are still apparently drawing more than 10% of the city's available power. And are there any limitations in place to keep them from further increasing their energy use? Since the homeowners and businesses are getting impacted by the energy overruns, their rights should have precedence over the money printers that moved into town.
    Reply
  • alextheblue
    20800490 said:
    "...whereas most of the country pays upwards of $0.10 per kWh"
    Wow. Complaining about 10c/Kwh.
    AUS pay ~40-70c/Kwh :/
    Nobody was complaining about that. Re-read the article. They're complaining that when they exceed their power budget, rates SPIKE far above their normal rates (read: what you're used to paying) and indeed spike well above the national average.

    Imagine you're not living in Australia... you're someplace far colder. Now imagine it's winter, and your power rates went from less than half the national average to 3X or so above national average - with spot rates rocketing sky high, several times even what it costs Down Under . Electric heat draws a lot of power. Better go chop more wood, and if you're old, I hope you have friendly neighbors.

    Also, if you have issues with how expensive everything is in Australia (Aussies constantly complain about unfair prices compared to US), ask some former Soviets for their take on the problem. I'm sure they'll have some interesting information for you, comrade.
    Reply
  • alextheblue
    20801118 said:
    It doesn't sound like they really put their foot down, seeing as the existing large-scale crypto-mining operations are still allowed to operate there, and are still apparently drawing more than 10% of the city's available power. And are there any limitations in place to keep them from further increasing their energy use? Since the homeowners and businesses are getting impacted by the energy overruns, their rights should have precedence over the money printers that moved into town.
    I don't want to jump to conclusions and say the council members are probably being bribed... but the council members are probably being bribed. The mayor is the only one that sounds like they give a flying fark about what is happening, but they have to fight with the council.

    It's not just Plattsburgh. Local politicians everywhere are just about as scummy as national ones. With less eyes scrutinizing them.
    Reply
  • Spock_rhp
    being an ex-employee of a northwoods electric utility, this is how it works -- Plattsburg municipal power receive a share of the hydro power produced at Niagara falls. The entire output of that government facility is shared by municipal power utilities from Vermont through New York and into Pennsylvania . The amount of cheap power so produced is constant and can not be increased.

    When Plattsburg, etc. exceed their allotted cheap hydro power, they have to buy or make own power at whatever it costs. Some have other dedicated power sources and/or agreements -- Plattsburg apparently does not. Thus, their excess needs come from whatever source available, even if that's a gas turbine plant located in Quebec which charges free market, for profit rates to American buyers.

    Eventually, the Plattsburg "deal" will be remade more like the Burlington deal -- residential use gets first call on the cheap hydro power and commercial use pays more like free market rates ... at which point the cryptocurrency miners may look for another location that isn't yet that smart and still lets these commercial ventures that don't serve the local people in any way take part of the super cheap power for their private profit.
    Reply
  • Plumboby
    Its worse in NZ damn auuzies complain just as expensive in NZ or worse power food technology etc, we are the country where if your a big company that wanna makes easy $ sell over priced jusnk u make a killing.
    Reply