The moratorium will affect large mining farms using more than 250-kilowatt hours and exclude hobbyists. The city is set to welcome many mining farms due to lower electricity rates but this would put pressure on utility forcing it to but more costly power in the market.
The city of Plattsburgh is proposing an 18-month moratorium on cryptocurrency mining farms following significantly higher utility costs and other related concerns in the recent months. The moratorium will not affect existing crypto mining farms if approved at March 15 Common Council meeting.
Instead, it will affect new mining farms, which are attracted to set up mining farms in the city due to its low electricity rates. It will specifically affect farms using more than 250-kilowatt hours per year per square foot, which puts them in the High-Density Load Service category. Thus, it is at a target at large server farms and will exclude hobbyists mining at home.
Mayor of Plattsburgh Colin Read has said that the development in cryptocurrencies in the city. It had happened so fast and they will need to first figure out a way. Thus, ensuring that it is being done right in order to keep the community safe. He said many farms want to establish operations in the city.
The mayor said that the mining farms equate to “a small space heater,” referring to the amount of heat they produce and the fact that the use huge amounts of power.
The city currently has two huge mining farms which have been running for about a year now. One in the former Imperial Mill site and one in Skyway Plaza.
Cryptocurrency mining farms in the city sometimes use as much power as used by Georgia-Pacific, one of the city’s largest users. This has strained city’s power utility. The Municipal Lighting Department, which gets inexpensive power from a hydro operation on the St. Lawrence River, provides residents and businesses with low electricity rates.
Once their power allotment is over, they have to buy power in the open market, which can be expensive. This would increase their costs, which is passing to consumers in their bills. An example is what happened in December and January cold months. During these two months, bills exceeded normal rates by hundreds of dollars for some customers.
However, it would raise concerns about whether the mining farms are not customers too. He said the Public Service Commission, which regulates municipal utilities. It is looking into imposing a tariff on cryptocurrency mining farms to reduce their burden on other ratepayers. That way, the MLD will continue providing power to them according to MLD Manager Bill Treacy
Reed said since crypto mining farms cannot seek to stop using electricity. At present, the city has to deal with the issue of safety. Hence the moratorium will be a time when the city will first figure out proper building and zoning codes. Since to ensure mining farms do not present fire hazards in the community.
“We don’t want shoddy operations,” Read said. “The moratorium is to give us some time to explore the ramifications of health and safety issues.”
The city will also consider ways of capturing the heat and reusing it. However which will benefit the miners and the government as well, according to Reed.