New York State is offering some respite to cryptocurrency miners after its regulators approved a new electricity rate for an upstate utility that lets mining projects negotiate deals there.
On Thursday, state lawmakers lowered the prices for Massena’s municipal utility, which will review its contracts with miners on an individual basis. The move comes after a March order that New York officials dispatched to 36 municipal power authorities, including Massena’s, to increase the rates for miners while leaving them unchanged for consumers.
New York has become an attractive destination for cryptocurrency miners due to its abundance of hydropower sources and the resulting cheap electricity. The situation in the state is comparable to that in countries and regions like Iceland, China, or Canada’s Quebec province. The authorities are trying to strike a fair balance with electricity rates, favoring residents while also attracting new mining ventures.
In June, for instance, Canadian state-owned power producer Hydro-Quebec was ordered to increase the electricity rate for miners three times to C$0.15 per kilowatt-hour. The change was said to be temporary and applicable only to new companies.
However, New York has chosen to leave a door open for crypto miners. John Rhodes, chairman of the New York State Department of Public Service, said:
“We must ensure that business customers pay a fair price for the electricity that they consume. However, given the abundance of low-cost electricity in Upstate New York, there is an opportunity to serve the needs of existing customers and to encourage economic development in the region.”
In upstate New York, the old hydroelectric dams set up decades ago have allowed municipal utilities to provide cheap energy for residents. In Massena, consumers pay about $0.039 per kilowatt-hour, which is much lower than the average US price of almost $0.13.
In March, the city council of Plattsburgh, a small town in New York State, approved a moratorium to limit the activities of crypto miners until a solution was found.
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