Bitcoin Miners in Washington to Pay More for Electricity

Bitcoin miners in Chelan County, Washington will now have to shell out more for the electricity following Public Utility District‘s decision to increase energy tariff from next year.

The increased energy rates are not just applicable to Bitcoin mining centers but to other energy intensive operations including regular data centers and server farms. According to reports, the public discussion and negotiations regarding the new electricity rates extended for over 18 months before reaching this point. Bitcoin business owners in the region took part in these negotiations as any increase in the energy costs may significantly affect their profitability. The effects will be further compounded by the recent halving of Bitcoin rewards and stagnant Bitcoin price.

Bitcoin mining farms are classified as High-Density Load consumers under the ‘Schedule 35‘ provided they consume over 250-kilowatt hours of electricity per square foot of operational floor space in a year, with the requirement not exceeding 5 megawatts at any point in time.

However, reports suggest that none of the representatives of the Bitcoin mining operations in the region were present during the voting process. The results of the voting are said to be unanimous in the favor of new increased tariff which will come into effect on January 1, 2017.

Starting next year, High-Density Load operators will have to pay a monthly charge ranging from $130 to $860 per meter along with additional $5.50 per kilowatt and $0.027 per kilowatt hour as monthly demand charges and energy charges respectively. They will also have to make an upfront payment to cover all the costs incurred by the department to distribute power to the facilities.

According to the Public Utility District commissioners, the new rates were introduced after they noticed a sudden surge in demand for electricity. Upon study, it was discovered that the surge was driven by increased Bitcoin mining activity in the county, which was otherwise known for cheaper energy prices compared to other places in the United States.

Earlier this month, MGT Capital Investments Inc. (NYSEMKT:MGT), a company owned by John McAfee announced its plans to launch a new 2 PetaHash capacity mining operation in Washington State, expected to be operational next month. It is not clear whether recent developments will affect the plans or not.

Ref: GovTech | Image: MiningLifeOnline