US’ Kentucky Begins Evaluating Cost-Effective Electricity Operations for BTC Miners

Bitcoin miners lost over $1 billion (roughly Rs. 8,200 crore) during the recent crypto crash.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 6 December 2022 13:06 IST

US’ Kentucky Begins Evaluating Cost-Effective Electricity Operations for BTC Miners

Photo Credit: Bloomberg

Kentucky Resources Council and the Kentucky Public Service Commission are probing contracts

Highlights

Crypto miners have recorded a major dip in crypto
Kentucky authorities do not wish to burden state residents
Kentucky had released funds previously for BTC mining upgrades as well

The authorities of Kentucky state in the US are opening a probe to check if subsidising crypto mining operations would spike up the electricity costs for state dwellers. The development comes in the backdrop of the US, gradually emerging to become a hub for crypto miners, that are swarming to the country from several parts of the world. The Kentucky Public Service Commission (PSC) is now examining two contracts, that propose to provide electricity to BTC miners at discounted rates.

The contracts have been extended to the Kentucky authorities by Kentucky Power and Ebon International LLC. While the former is an established power supplier in the state, the latter already runs mining facilities in Louisa and Waverly.

“Cryptocurrency mining is extremely and exponentially energy-intensive by design, and the discounted rates for these facilities could result in higher electric bills for everyday Kentuckians,” an official statement from the Kentucky authorities read.

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The investigations into these two contract proposals have been opened by advocates from the Kentucky Resources Council and the Kentucky Public Service Commission.

The development follows the record losses that BTC miners saw amid the ongoing crypto slump.

In August, a Bloomberg report had said that Bitcoin miners lost over $1 billion (roughly Rs. 8,200 crore) during the recent crypto crash.

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If states like Kentucky offer electricity at slashed prices to BTC miners, it could help the community to break out of the loss-spell. On the other hand, excessive usage of power grids to support the electricity usage by BTC miners could overload the system and hinder smooth operations.

The PSC, back in 2021, had approved $12.7 million (roughly Rs. 104 crore) to upgrade Big Rivers Electric. The intension was to enable the firm to facilitate crypto minting via the Blockware Mining facility in Paducah, Kentucky.

“Investments like these are often made at the expense of long-overdue upgrades that would benefit everyday people. The PSC does not have to approve this kind of spending for Kentuckians to end up stuck with the bill. When a utility builds new or upgrades infrastructure for a company that then relocates, everybody else's electric bills go up to cover the costs,” the post noted.

BTC mining, between July 2021 and 2022, led to the emission of 27.4 million tons of carbon di oxide, equivalent to the emissions of as much as six million cars yearly. The findings were published by Earthjustice and the Sierra Club in a new Guidebook.

While Kentucky's stance on accepting the offers from Kentucky Power and Ebon International LLC remains awaited, other parts of the world are also looking to control the demand, usage, and availability of electricity especially when BTC mining is popular in the area.

Nations like Iran, Kazakhstan, Kosovo, as well as regions in Russia had to temporarily ban crypto mining.

The Svaneti city of Georgia, last year, actually made crypto miners pledge a holy oath against indulging in the process, due to electricity shortage.

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Further reading: Cryptocurrency, Crypto Mining, Kentucky

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More