New York power companies can now charge Bitcoin miners more

Enlarge / Cryptocurrency mining in operation. (credit: Getty Images)

On Wednesday, the New York State Public Service Commission (PSC) ruled that municipal power companies could charge higher electricity rates to cryptocurrency miners who try to benefit from the state's abundance of cheap hydroelectric power.

Over the years, Bitcoin's soaring price has drawn entrepreneurs to mining. Bitcoin mining enterprises have become massive endeavors, consuming megawatts of power on some grids. To minimize the cost of that considerable power draw, mining companies have tried to site their operations in towns with cheap electricity, both in the US and around the world. In the US, regions with the cheapest energy tend to be small towns with hydroelectric power. (Politico recently wrote extensively about the Bitcoin mining boom in Washington state's mid-Columbia valley, a hotspot for cheap hydro.)

But mining booms in small US towns are not always met with approval. A group of 36 municipal power authorities in northern and western New York petitioned the PSC for permission to raise electricity rates for cryptocurrency miners because their excessive power use has been taxing very small local grids and causing rates to rise for other customers.