Everything is bigger in Texas — that saying could potentially apply to electricity costs as an influx of cryptocurrency miners floods the state.
A combination of non-existent regulatory measures and low electricity costs are making Texas a perfect haven for crypto miners with their power-hungry machines. In particular, miners seeking refuge from China and Kazakhstan are finding a home in Texas.
To address the situation, the Electric Reliability Council of Texas (ERCOT) will be holding a vote on whether to assess the crypto mining situation. In particular, the vote will be on whether to take stock of the number of mining operations connected to the state’s electrical power grid and the speed at which they’re operating.
“Regardless of what the number of mines may be, the burden of upgrading a shaky grid in order to continue attracting crypto miners from across the world largely falls on Texas utilities, who must evaluate the option of directing funds toward protecting against power outages or long-term upgrades to the system,” The Street reports.
Consumers are already plagued with rising energy costs, particularly after Russia’s invasion of Ukraine pushed oil prices higher and thus raised gas prices. For the cryptocurrency industry to evolve, it must look for ways to proceed with operations without high energy consumption — adding sort of a sustainability component to attract more investment dollars.
“The energy required to validate just one Ethereum transaction could power a U.S. home for more than a week. The energy required for a Bitcoin transaction could power a home for more than 70 days,” said Frank Pallone, the Chairman of the House Energy and Commerce Committee.
Using New York and Washington as Sample Cases
Just how high will electricity bills in Texas get? Residents can look to New York as a sample case study — the city of Plattsburgh in particular.
The city temporarily banned crypto mining in 2018 as a result of skyrocketing prices for power until regulatory measures were in place to control costs. Bloomberg reports that two counties in the state of Washington also experienced similar issues.
“Overall, Bitcoin mining cost residents and businesses in upstate New York about $250 million a year in higher annual electricity bills, a 2021 University of California Berkeley study concluded,” Bloomberg reports. “Mining pushes up monthly electric bills about $8 for individuals, and $12 for small businesses, the researchers estimated.”
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