Washington’s Chelan County To Increase Electricity Rates For Crypto Miners

News, Regulation | November 19, 2018 By:

The Chelan County Public Utility District (PUD) in Washington state has proposed a new electricity rate structure for cryptocurrency miners.

The new rate structure will be similar to the current structure, referred to as Schedule 35, that cryptocurrency miners are paying right now. But the proposed structure (Schedule 36) will market on the energy price as the Chelan PUD will need to buy power on the market in order to serve the variable load associated with crypto mining. This means the costs of increased demand data mining would bring would be passed onto the crypto mining operators.

“Our upfront capital charges are intended to recover the accelerated cost of infrastructure investment in our system, mainly in our substations, which is kind of the main component of the distribution system,” said Customer Utilities Rate Adviser Lindsey Mohns. “So the upfront charges take into account the capacity that’s used by cryptocurrency miners.”

The proposed structure will apply to any customer involved in computing or data processing load related to cryptocurrency mining, bitcoin, blockchain, proof-of-work or other loads having similar characteristics, including any of the following: high energy use density, high load factor, need for more than routine alterations to the District’s Electric Service Facilities in order to maintain safety, load that is portable and distributable, highly variable load growth or load reduction as an individual customer and/or in aggregate with similar customers in the district’s service area.

Kimberlee Craig, the Public Information Officer of Chelan PUD, said that “Chelan PUD is addressing the rate structure in a way that captures the cost and protects the investment for the customers that are already here and invested greatly in their system.”

During the November 7th meeting in which the Chelan PUD explained the proposed pricing system, many members of the local crypto community expressed their displeasure at the proposed increased costs. They said that if the new rate structure were to be approved, they would move their business elsewhere.

“Looking at it in a bigger picture it’s not just mining but services that can happen around that,” said Denton Meier, owner of mining company Silicon Orchard. “Like jobs creation in programming, finance, and other things that will happen over time with the cryptocurrency market. We have the opportunity to become a hub for that. With rates that price us out of that ballgame it’s not that root that we need to then grow those other businesses, so that will happen elsewhere.”