- Texas has become home to cryptocurrency mining companies thanks to the state's cheap electricity.
- The energy associated with these operations has increased costs for electricity customers across the state.
- That could be as high as $1.8 billion a year, according to New York Times models.
If you live in Texas and have noticed your bills have increased over the past year, cryptocurrency mining could be a factor.
As of 2021, a number of bitcoin mining companies have relocated to Texas and are driving an increase in energy consumption that could lead to a 5% annual increase in utility bills for customers in Texas, or an additional $1 .8 billion a year. , according to the model of a research firm run by energy and consulting firm Wood Mackenzie for the New York Times.
Considering that the Electric Reliability Council of Texas, or ERCOT for short, has over 26 million customers, that's an extra $69 per annual bill.
The allegations show how the presence of cryptomining in the state affects all residents of the state.
Riot Platforms, which operates the state's largest mine in Rockdale, uses as much electricity as 300,000 surrounding homes, the Times reported.
"The bill-rising allegations were made using proprietary black box simulations, not actual data, and the NYT and its sources have not made this data publicly available so it can be properly challenged," a Platforms Insider told Platforms Insider. Riot spokesperson. .
The company did not respond to a request for details on energy usage.
In 2021, China cracks down on cryptocurrencies. According to Reuters, financial institutions and payment companies were banned from facilitating cryptocurrency transactions in May of the same year, and just four months later, another ban was issued preventing cryptocurrency transactions and cryptocurrency mining in the country.
Cryptocurrency mining companies need to relocate, and some rural areas in Texas have welcomed these companies.
For example, Milam County, home to a once-thriving aluminum factory that closed in 2008, is offering Riot Platforms "a 45 percent local tax rebate for 10 years," according to the Texas Tribune.
The state's low electricity costs also make it a prime location for such companies, Kerry King, associate director of the Energy Institute at the University of Texas at Austin, told the Texas Observer.
However, the energy required to mine cryptography, which requires connecting multiple servers to solve increasingly complex mathematical problems, is significant. Not only do the machines that process cryptographic transactions need power, but these data centers also need to be cooled.
The associated energy costs are being passed on to ordinary Texans, whose electric bills are already increasing as adverse climate change strains the state's power grid.
“Texans continue to have high electric bills due to a number of factors,” an ERCOT spokesperson told Insider.
The spokesman cited weather and fuel prices as the main reasons for the increase in electricity bills.
In February 2021, arctic weather hit the state, causing increased demand for electricity to keep residents' homes warm, leading to nationwide blackouts. Then, in July 2022, mining companies were ordered to halt work to lighten the grid due to rising global temperatures and potential outages.