Bills and Rates

Grant PUD sets cryptocurrency rate class, Chelan extends moratorium

Commissioners for Washington state’s Grant County PUD unanimously agreed on May 8 to move forward with the creation of a new customer rate class for cryptocurrency miners that would protect the interests of the utility’s existing customers, the PUD said.

By adopting this policy, the board also affirmed its position that core customer groups – residential, irrigation and commercial customers – will continue to be first in line for access to the benefits of low-cost energy generated at Grant PUD’s hydro facilities.

The policy also creates a priority status for traditional commercial and industrial customers who are waiting for power service. The new “Evolving Industry” rate class provides more certainty of costs and waiting periods to the large number of cryptocurrency firms interested in service, Grant PUD said.

The PUD noted that with the new plan, cryptocurrency firms would pay a to be determined rate that covers both Grant PUD’s cost to provide their electricity and any elevated risks they pose to the utility’s other customers. 

“Similar to the pricing for current large industrial customers, the new policy requires these emerging businesses to pay more, so core residential, irrigation and commercial customers can continue to pay below-cost rates. Evolving Industry customers would cover extra costs if Grant PUD has to pay more to bring additional power resources into the county to serve their load,” the PUD said on its website.

By July 1, Grant PUD plans to begin processing applications for traditional commercial and industrial customers who have been waiting for electrical service since last fall while staff developed this new policy. The utility is expected to implement the new Evolving Industry rate class by Aug. 1.

The new Evolving Industry rate is the result of six months of research and analysis.

Grant PUD said the rate would apply to businesses:

  • Whose primary revenue stream is evolving and unproven;
  • Whose ability to pay power rates long term is uncertain or at risk, compared to traditional customer classes;
  • Who are vulnerable to extreme value fluctuations of their primary output;
  • Who are at risk for detrimental changes in regulation; and
  • Who could become part of a large concentration of power demand in Grant PUD’s service area.

“Early on, cryptocurrency firms likely will be the only members of the Evolving Industry customer class, but the class will apply to all businesses that meet the same proposed risk criteria,” Grant PUD said.

Evolving Industry customers would be placed in a secondary waiting queue for service and traditional commercial and industrial customers’ applications will be processed first. Evolving Industry customers would also pay an application fee and expenses to reimburse engineering costs, plus upfront costs to cover infrastructure upgrades needed to serve them.

Grant PUD said that since the summer of 2017, it has received an unprecedented 125 new service requests that total above 2,000 megawatts of electricity, which is more than three times the electricity needed to power all Grant County homes, farms, businesses and industry, it noted. Approximately 75 percent of these requests are from cryptocurrency firms.

Chelan County PUD commissioners vote to extend moratorium

Meanwhile, on May 14, Chelan County PUD commissioners voted unanimously to extend a moratorium put in place in March 2018 for taking or processing applications for electric service for cryptocurrency mining.

Commissioners on May 14 listened to comments from customer-owners and cryptocurrency miners at a public hearing and staff reviewed steps taken since the board imposed the March 19 application moratorium for cryptocurrency mining and similar data operations.

After hearing staff and public comments, the commissioners voted to extend the moratorium until Aug. 6 and hold another public hearing that day.

Chelan PUD General Manager Steve Wright said, “A lot has changed since we first started talking about cryptocurrency mining in late 2014. Keep in mind that our public power mission is to enhance the quality of life for customer-owners in Chelan County by providing the best value for the most people for the longest period of time.”

Chelan PUD Commissioner Garry Arseneault added, “We are blazing a path here. There are commissions throughout the state and companies across the United States who are watching. We want to get this right. I am in favor of extending the moratorium, not so we can find a way to say ‘no’ but so we can find a path forward.”

In a post on its website about the May 14 meeting and next steps, the Washington state-based PUD said that Lindsey Mohns, Customer Utilities business manager at Chelan, outlined the substantial work accomplished so far to understand the impacts of responding to service requests from cryptocurrency operators. The PUD has requests that could more than double the PUD’s retail electric load.

The PUD said that analysis has found pockets of potential transmission capacity available to support the high-power demand of cryptocurrency operations. There are a few areas with distribution system capacity, too, but most locations would require building expensive infrastructure including substations to serve potential cryptocurrency load, it noted.

Chelan also said that staff proposed creating a specific cryptocurrency rate to make sure risks related to miners’ mobility, bitcoin price swings and the industry’s mismatch with the PUD’s long-term business model are addressed.

Discussions with commissioners on defining such a rate class will continue in June, the PUD said.

In April, commissioners for Chelan County PUD approved new fees and charges for the investigation and enforcement of unauthorized services including cryptocurrency and similar data operations and for the loss of useful life for overtaxed power equipment.

Washington state’s Mason County Public Utility District 3 commissioners on April 10 approved a moratorium on accepting applications for service to “cryptocurrency” operations. Plattsburgh, New York, and the city of Wenatchee, Wash., recently imposed moratoriums on cryptocurrency mining.

In March, Washington state’s Benton PUD said that in response to growing customer interest in cryptocurrency mining and blockchain operations, coupled with concerns about distribution system safety and reliability, its Commission approved an electricity intensive load policy.

Bitcoin miners are being drawn to the Pacific Northwest states of Oregon and Washington, which feature some of the lowest electricity rates in the country, thanks to available hydropower.

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