Plattsburgh’s councilors have unanimously voted against cryptocurrency mining, coming the first U.S. city to ban mining operations for the next 18 months.
The Mayor stated that the purpose of the law is to consider “regulations before commercial cryptocurrency mining operations results in irreversible change to the character and direction of the city.”
The price for electricity in Plattsburgh is mostly low thanks to a 104 megawatt-hours per month allocation of hydroelectric power by the New York Power Authority. The average price of electricity in the U.S. is over 10 cents per kilowatt hour. The residents of Plattsburgh pay 4.5 cents, and Plattsburgh industry a mere 2 cents.
The cheapness of their electricity has attracted many cryptocurrency miners to this city. One the mining companies, Coinmint, supposedly used up 10% of the entire city’s hydropower allocation for the months of January and February.
The issue here is that when the city uses more than it was allocated, the prices can go up very quickly. In January, the city was constricted to purchase more electricity from other suppliers, with the costs remaining to be split among the city’s bill-payers.
Even though such incidents have happened occasionally, especially in the colder months when electricity usage is at its highest, residents are worried that if new miners will come to the city, the electricity bills will always be high.
Colin Read, the local mayor said, “I’ve been hearing a lot of complaints that electric bills have gone up by $100 or $200.”
Industry has also been affected. The CFO of Mold Rite, a plastics company, Tom Recny, said that they had to pay $22,000 more for electricity last month. The company has almost 500 employees from the area. By comparison, cryptomining operations imply a much lower number of work places.
The town’s existing mining companies are regarded by locals as responsible and open their viewpoint. Still, the council wished to make sure that new operations will start installing here before they implement a long term solution. “We could use 100 megawatts in two months’ time if we opened up the floodgates,” said Mayor Read, “and then there would be no cheap power left for our residents.”
The town’s miners also appear to be ready to cooperate and work with the city. “The last thing we want to see is people’s bills increase,” said Kyle Carlton, a Coinmint spokesman. He suggested that cryptocurrency companies could shut down their operations temporarily when the city is close to reaching their hydropower allocation. “All options are on the table as we seek to partner with the city,” said Carlton.