Cryptomining boom has people’s energy bills skyrocketing; feds mull new rules

Cryptomining boom has people’s energy bills skyrocketing; feds mull new rules

This is not the summer that Americans want to deal with an unknown number of cryptocurrency firms unexpectedly flooding the power grid. More Americans are already expecting to experience rolling blackouts as the nation’s power grid strains against record heat and drought conditions currently spiking energy usage from coast to coast. Now, lawmakers are worried that US cryptocurrency mining operations planning for rapid growth will potentially further destabilize the grid while quietly spiking carbon emissions and driving up utility costs to more and more consumers.

That’s why Senator Elizabeth Warren (D-Mass) joined five other Congress members to submit a letter to the Environmental Protection Agency and Department of Energy, recommending the agencies combine forces to draft new regulations requiring emissions and energy use reporting from all cryptomining operations nationwide. Only then, Warren and others suggest, will we know exactly how many firms are operating in the US, how much energy is being used, how much damage to the environment is being done, and how many communities are being affected.

The letter provided the EPA and DOE with new information from Congress’ investigation into the environmental impacts of “seven of the largest cryptomining operations in the US.” It’s just a fraction of the whole, but together, these firms plan to increase their total mining capacity by nearly 230 percent, requiring an added electricity consumption than is used to power all the homes in Los Angeles. None of the firms said that it tracks the impacts on consumers connected to power grids, and none of the firms seemed to think they had any reason to fully comply with Congress’ request for information.

“None of the companies provided full and complete information in response to our questions,” Warren et al. wrote. “But the information they did provide reveals that these companies’ mining operations are significant and growing, have a major impact on climate change, and that federal intervention is necessary.”

Only three firms shared data on greenhouse gas emissions, but the pattern the limited dataset revealed was troubling to Congress members: “These three companies that provided clear emissions data alone are currently responsible for approximately 1.6 million tons emitted annually, the equivalent of almost 360,000 cars—and these figures are only set to go upwards in the coming years.”

Warren et al. have given the agencies until August 15 to verify their authority to enforce cryptomining reporting. They suggested that some reporting, like emissions data, could be required through existing legislation, like the Clean Air Act.

Impact on consumer utility bills

After China banned cryptomining last fall, the US became the prime destination for firms relocating. Within the past few years, the Congress members say in the letter, the US has supplied “over a third of the global computing power dedicated to mining Bitcoin” (the most popular cryptocurrency). As more firms move into the US, Warren et al. said that people who live and do business near these firms have already ended up paying higher utility costs.

The biggest example comes from Plattsburgh, New York. The Congress members described a report detailing “residential electricity bills that were ‘up to $300 higher than usual’ in the winter of 2018.” In that case, New York responded to growing concerns by passing the first US moratorium on new cryptomining operations. Warren et al. are not urging a nationwide ban like China’s but quoted a study from the Haas School of Business at the University of California, Berkeley, that showed the extent of the issue and implications for other areas impacted by future growth: “the power demands of cryptocurrency mining operations in upstate New York push up annual electric bills by about $165 million for small businesses and $79 million for individuals.”

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