PUD ups costs for Bitcoin miners

An electric utility has created a new rate class that could dramatically affect the local development of an “evolving industry” with an Electric City participant.

Grant County Public Utility District commissioners voted last week to increase electricity rates for high-power cryptocurrency miners to protect “Grant PUD and its customers from risk,” a PUD press release stated Aug. 28. “Starting April 1, 2019, cryptocurrency miners and other ‘evolving-industry’ firms will pay the first of a three-year, graduated increase to a new, above-cost electric rate designed to protect Grant PUD from risk and preserve below-cost rates for core customers.”

Commissioners unanimously approved the new rate.

A Canadian Firm that has fitted an Electric City building for mining Bitcoin says it has spent $2.6 million on the effort, expecting to make use of the PUD’s more favorable current rates.

“Your industry is unregulated and high-risk,” said Commissioner Tom Flint to a handful of cryptocurrency miners who attended the meeting at PUD headquarters Aug. 28. “This is the best way to ensure our ratepayers are not impacted by this unregulated, high-risk business.”

Since summer 2017, Grant PUD has received new service inquiries for more than 2,000 megawatts of power.

That’s more than three times the electricity needed to power all Grant County homes, farms, businesses and industry, the PUD said. Approximately 75 percent of those requests came from cryptocurrency miners.

The PUD produces its own power at two hydroelectric dams on the Columbia River. Power needed beyond their capacity has to be purchased on the open market, which can drive costs up for residents and existing businesses.

Grant PUD staff recommended a gradual phase-in for the new rate to limit rate shock for existing evolving-industry firms.

Those customers will pay a 15-percent increase next year, a 35-percent increase in 2020 and a 50-percent 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.

Evolving-industry customers with monthly energy use that averages 5,000 kilowatts per hour will see rates increase from 4.9 cents per kWh to 13.7 cents per kWh.

For larger evolving-industry customers, billing will increase from 2.6 cents per kWh to 7.9 cents per kWh.

“Increased energy use could also require out-of-pocket costs to pay for higher-capacity transformers or other equipment,” the PUD said. “Evolving-industry customers must pay up-front the cost for lines, poles, transformers, studies and other equipment needed to expand or connect.”

Yana Papova, chief financial officer of Atlas Blockchain Group, which purchased the former Young’s Welding building in Electric City for the purpose of cryptocurrency mining, declined to comment on the new rate change, which will inevitably affect that business.