Could crypto miners raise your electricity bills? Idaho Power says yes. What to know

BOISE (Idaho Statesman) – Cryptocurrency miners are flocking to Idaho for its cheap power. State authorities say the additional energy demand is placing a burden on the entire electrical grid.

In fact, Idaho Power asked the Idaho Public Utilities Commission to create a new customer class for large-scale crypto miners, said Jordan Rodriguez, a spokesperson for Idaho Power.

The new classification was approved in June, according to a PUC spokesperson, but a Puerto Rican crypto mining company called GeoBitmine requested reconsideration. The PUC is now taking comments on that petition.

“These customers have the potential for significant energy demand, which could require Idaho Power to build additional infrastructure,” Rodriguez said by phone.

GeoBitmine said in its argument for reconsideration that the new customer class is discriminatory and would halt its plans to develop a crypto-mining operation at an idled J. R. Simplot Co. potato processing plant in Aberdeen that would use waste heat to power year-round greenhouse farming. A University of Idaho Research and Extension Center planned to use the operation for seed research.

Both the crypto mining and indoor farming would use a consistent electric load of 6 megawatts, the petition said. But GeoBitmine argues the rates and terms of service that would apply under the new classification “make it impossible to proceed” with the joint venture because of potential power interruptions.

“The loss of electricity during the hottest part of the day in the hottest months of the year will be catastrophic for indoor food production, potato storage and seed research facilities,” the company said.

CRYPTO MINING COMPANY CALLS CLASSIFICATION DISCRIMINATORY

It also said the classification would force ratepayers to suffer provisions that are not imposed on any other customer class in Idaho Power’s system.

“It is black-letter utility law that the commission may not approve, and utilities may not charge, rates that treat customers preferentially or to disadvantage some customers to the benefit of other, similarly situated, customers,” GeoBitmine said in its petition.

Rodriguez said increased demand stemming from crypto-mining operations could require new substations, lines, transmission resources and power plants. Costs for these assets are paid by all customers through rates over time.

Adding new infrastructure could increase electricity rates for everyone. If the crypto miners were to pack up and leave the state, the remaining costs would be left behind, and the rest of Idaho Power’s customers would foot the bill.

And with the volatility of the crypto industry, it’s unclear how long these miners will stick around.

“What we don’t want is to have a bunch of speculative load come online in a short amount of time that would potentially require us to go out and build new resources or purchase a bunch of energy in order to meet demand,” Rodriguez said.

The new classification for industrial crypto miners would apply to operations drawing less than 20 MW. According to Rodriguez, 20 MW is enough to power about 15,000 homes. Anything larger falls into an existing classification with commission oversight.

The PUC separates customers into classes based on the way they use power, including residential users, small businesses, larger commercial businesses, irrigators and farmers.

Crypto miners run powerful computers executing complex mathematical equations, often at all hours, to mine, or create, digital currencies.

ELECTRICITY A BIG COST FOR CRYPTO MINERS

Mike Louis, engineering program manager for the PUC, said electricity is a major cost for any crypto-mining operation.

“There is an incentive for them to chase the lowest-cost electricity,” Louis told the Idaho Statesman by phone. “And because they don’t have other infrastructure holding them to this location, typical of other customers, it places them in a class where there is a need to protect against stranded assets.”

To date, most crypto miners in the state are hobbyists, operating out of their basements or garages, according to Rodriguez. Those people would not be affected by the new customer class.

“It’s unlikely for a residential person to do enough mining to make these big impacts that could force us to build additional infrastructure,” Rodriguez said.

At the moment, Idaho Power doesn’t have any customers who would fall into the new customer class. While it has some customers crypto-mining under residential or small general-service schedules, he said, Idaho Power cannot tell how many. But the utility says it “has received interest from customers proposing approximately 2,000 MW of potential cryptocurrency mining operations.”

The utility says it has some of the lowest energy prices in the country, about 30% lower than the national average, with variations depending on customer class.

Idaho also has a minimal risk of natural disasters, which can disrupt data centers or other large buildings filled with servers, computers and other equipment.

“It’s viewed as a low-risk location to carry out these operations,” Rodriguez said. “It’s also a relatively low-cost energy location as compared to operating in California.”

Idaho Power is already experiencing an increase in demand thanks to substantial population growth over the last decade or so. Excessive heat and fire activity also puts a strain on the grid.

IDAHO POWER WOULD SHUT OFF CRYPTO MINING DURING PEAK DEMAND

One of two key parts of the utility’s request to the PUC is the ability to shut off crypto-mining operations during times of peak energy demand to avoid any shutoffs for Idaho Power’s remaining customer base. Heat waves are the best example of a time when its system is running near capacity, Rodriguez said.

“It’s something we’re keeping a close eye on,” he said.

The second key part is the authority to charge crypto miners a “marginal rate” for any extra electricity Idaho Power must buy or generate for them. Marginal rates are normally higher than base rates.

A report released Sept. 8, commissioned by the Biden administration, detailed the carbon footprint of digital assets. The report warned that crypto-related electricity usage could harm efforts to reduce greenhouse gas emissions.

The U.S. hosts about a third of global crypto operations, according to the report. They consume an estimated 0.9% to 1.7% of the country’s electricity usage.

“Some crypto-asset technologies currently require a considerable amount of electricity for asset generation, ownership and exchange,” the report said. “Depending on the energy intensity of the technology used, crypto-assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals.”