In the US state of Washington, Grant County Public Utility District (Grant PUD) will be hitting cryptocurrency miners and other “evolving-industry” firms with the first of a three-year, graduated increase to a new, above-cost electric rate.
The aims of the rate adjustment include protecting Grant PUD from risk and preserving below-cost rates for core customers.
Commissioners have unanimously approved the new Rate 17 for evolving industries, following nearly a year of analysis, staff outreach to the county’s cryptocurrency firms and public comment on the new rate at every commission meeting since the rate’s initial proposal in early May.
“Your industry is unregulated and high-risk,” said Commissioner Tom Flint to a handful of cryptocurrency miners who attended the meeting. “This is the best way to ensure our ratepayers are not impacted by this unregulated, high-risk business.”
Flint’s fellow commissioners agreed and differentiated cryptocurrency mining from the data centers in Quincy and elsewhere, which own land and buildings, pay taxes, have solid credit records, store customer information and provide internet-based services.
“I don’t view miners as villains,” Commissioner Larry Schaapman said. “You have likened yourselves to the data centers, but you can only do one thing — mine bitcoin.”
Rate 17 customers will receive a 15% increase next year, a 35% increase in 2020 and a 50% increase in 2021, when the new rate will be fully in effect. Any new evolving-industry customers would come in at the rate-phase in effect at the time they begin operations.
Each annual increase will be calculated on the difference between what the evolving-industry customer is paying now (per kilowatt hour) and the higher, target rate.
The new rate compensates Grant PUD for extra risk and obliges evolving-industry customers to pay more than the cost to supply their power to subsidise sustainable below-cost rates for residential, irrigation and small and medium-sized business customers.
For examples of how the rate will apply, click here.
Grant PUD staff recommended a gradual phase-in for the new rate to limit rate shock for existing evolving-industry firms, while giving Grant PUD staff time to see how prospective evolving-industry customers respond to the new rate.
At this time, all Grant PUD customers in the evolving-industry profile are miners of cryptocurrency, including bitcoin, each with very high energy demand. Grant PUD will evaluate the rate class annually and adjust it, based on the anticipated change in total megawatts needed by existing and incoming evolving-industry customers.