More Washington electric companies putting brakes on crypto mining firms

Utilities companies want to assess potential long-term consequences before they allow more miners into their counties.

Electricity companies in Washington attract cryptocurrency miners because they offer some of the lowest costs for electricity. In April, mining giant Bitmain’s plan to establish a mining facility in the state has been approved, with 10 acres being leased to the company.

But not all of Washington is onboard with this. Other counties are pushing back against crypto mining in the state. Throughout the year, some Washington states have been hacking down on cryptocurrency mining activities. Early this year, a moratorium was approved by the Chelan County Public Utility District (PUD) in a move to limit cryptocurrency mining firms. Under the moratorium, the Chelan PUD can stop considering applications for mining firms.

Apart from refusing applications from cryptocurrency mining companies, some unauthorized miners have also been disconnected. Shortly after the announcement, the Chelan PUD heightened security in their facilities, anticipating a backlash from scorned miners. They installed bullet-proof panels and security cameras in their headquarters, although no incidents have so far been reported.

And now, Franklin county has followed suit, approving a moratorium to also allow them to stop reviewing any applications from cryptocurrency mining firms while they assess the potential long-term repercussions. The Franklin PUD may also impose different rates.

Charging crypto miners a premium for electric consumption is not unique to Franklin. New York, which was also initially attractive to miners due to electricity rates, also imposed a different electricity rate structure for cryptocurrency miners in the state. The move would supposedly create a balance between accommodating crypto mining companies while controlling the influx of mining firms and thus, protecting its residents from rising electricity prices.

Meanwhile, in other parts of the world, cryptocurrency miners are using excess electricity and renewable energy sources to their full advantage. Kumamoto Electric Power Company in Japan is set to start mining using excess solar energy in August.

A recent study by CoinShares Research also found that “bitcoin mining is largely driven on cheap renewable energy, dominated by hydro.” And that crypto mining is a good way to channel excess renewable energy—which at the moment, is quite a problem.

“…some miners circumvented policies by the argument that bitcoin mining represents a form of energy recycling, somewhat akin to a battery, whereby excess electricity otherwise wasted is instead converted into an exchangeable store of value. This could represent a wider global opportunity for renewable power plants struggling with periodic overproduction,” they wrote.