Colin Read, the Mayor of Plattsburgh, NY, will propose an 18-month moratorium on cryptocurrency mining while the city creates new zoning laws and regulations regarding non-residential energy consumption.
The town’s two Bitcoin operations are soaking up excess cheap power from local hydroelectric plants, risking higher power bills for ordinary homeowners.
Plattsburgh is a small town upstate, about 60 miles south of Montreal. It has a population of 20,000.
According to the city, the electricity consumed by the two Bitcoin facilities now exceed 10% of the city’s total reserves.
The two Bitcoin mining facilities — one of them an old paper mill converted into a Bitcoin mining plant by an entrepreneur named David Bowman — consume more than 11.2 megawatts of electricity.
One megawatt of coal-derived electrical energy can power between 600 and 1,200 homes.
Unsurprisingly, Bowman is adamantly opposed the proposed moratorium.
“I think the proposed law is unnecessary and I’m worried that Plattsburgh could miss out on an opportunity for innovation.
“It’s basically in the early stages of development like the Internet was. In my view, an outright moratorium would hurt the city more in the long run because it would miss out on all that,” Bowman said.
Plattsburgh has a cheap, fixed supply of energy from hydroelectric dams it built in the 1950s.
Yet the two existing Bitcoin mining facilities regularly exceed the margin of extra supply, according to town managers.
The town would have to buy extra, and expensive, energy on the open market to close the gap. Those costs would be passed on to residents in the form of higher energy bills.
“Bitcoin mining operations are adding on top of that, so we have to buy more power — definitely this year we’ve had to buy a lot more power,” said Plattsburgh Municipal Lighting Department Manager Bill Treacey.
“My system only has a certain amount of capacity in it, and if they use that capacity then I’m going to have millions of dollars upgrading.”
Cryptocurrency mining involves the use of hundreds or thousands of energy-hungry computers designed to solve blockchain algorithms, which are complex mathematical problems.
As the problems are solved, the miner receives Bitcoins as a reward.
Mayor Read’s cryptocurrency mining ban proposal will be publicly debated by Plattsburgh city officials and residents at a town meeting on March 15.
If the 18-month cryptocurrency mining moratorium is enacted, Plattsburgh would become the first city in the United States to enforce such a cryptocurrency-related ban.