Higher electric rates may end Central Washington bitcoin rush
In the last few years, rock-bottom electricity rates have attracted bitcoin miners and other virtual currency entrepreneurs to central Washington state. But in Chelan and Grant counties, that lure may be on the wane because of looming power price hikes.
The specialized computers that record and verify bitcoin transactions consume gobs of electricity. The public utility districts in Chelan and Grant Counties want to manage the power load by charging these operations more. A lot more.
Thomas O'Connell, a home-based cryptocurrency miner in Leavenworth, told the Chelan County Public Utility District board this week that higher rates would drive him away.
"I'm 25 years in this county, originally born here. I don't want to have to leave," O'Connell testified. "I don't want to have to move my business. I'd like to continue to put that money I earn back into the county. But it doesn't seem like I am going to be able to."
After listening to O'Connell and others at a public hearing, the Chelan PUD board maintained its course to vote on higher rates for cryptocurrency operations in late fall, as nearby Grant County already has. In the meantime, there are moratoriums on new hook-ups of energy-intensive bitcoin mining rigs.
Unlike traditional mining, there are no pickaxes and conveyer belts to be found. Instead, the giveaway that a bitcoin miner has set up shop is often the sound of cooling fans, be that at a converted warehouse, closet, cargo containers or a newly built data center. Industrial-strength cooling is needed to prevent racks of computer chipsets from overheating.
In Chelan County, the proposed cryptocurrency rates work out to around 8.5 cents per kilowatt hour for home-based miners and slightly over 6 cents per kilowatt hour for commercial and industrial operations. Those new electric rates are about double the regular residential and commercial rates and would take effect April 1, 2019.
In Grant County, Washington, the so-called "evolving industry" rate will roughly triple current electric bills. Grant PUD commissioners voted unanimously late last month to phase in the new rates beginning April 1, 2019.
“Your industry is unregulated and high-risk,” said Commissioner Tom Flint to a handful of cryptocurrency miners who attended the vote. “This is the best way to ensure our ratepayers are not impacted by this unregulated, high-risk business.”
The special rate class will top out after three staged increases at 13.7 cents per kilowatt hour for small-scale bitcoin miners and 7.9 cents per kilowatt hour for large-scale operations.
Cashmere resident Jeanne Poirier praised Chelan PUD management during a meeting in Wenatchee Monday for putting the brakes on the local bitcoin boom.
"The world is watching us here on these decisions and how we deal with it," Poirier said. "Is cryptocurrency's value worth the infrastructure upgrades and the environmental costs that come with it?"
Poirier said she believes that the high energy consumption of the global bitcoin network indirectly causes too much climate change pollution.
Larger-scale bitcoin miners are already hunting for greener pastures, and in some cases, finding them in other Northwest communities served by cheap hydropower.
This summer, the Port of Walla Walla and Columbia Rural Electric Association inked a deal with foreign-owned bitcoin miner Ant Creek LLC to host a large bitcoin mine near Wallula, Washington. The Dalles, Oregon, is also drawing interest from cryptocurrency and blockchain entrepreneurs.