Dive Brief:
- Citing demand that exceeded capacity, Hydro-Québec issued a temporary halt to processing service requests from cryptocurrency mining operations, which have overrun the region.
- The government of Québec has also announced a new framework for blockchain industry customers, and the utility will propose a selection process for projects that take into account the province's concerns.
- Cryptominers have flocked to Québec because of its inexpensive hydroelectricity, collectively putting a strain on the system. The same thing occurred in upstate New York earlier this year, and state regulators ultimately allowed municipal utilities to charge miners more for electricity.
Dive Insight:
Hydro-Québec will work with the provincial government to develop a new process for supplying energy to crypto mining operations and officials stress that they wat to avoid long delays that could allow economic opportunities to slip away. But while the new business and investment could be good for the area's economy, the fear is that it raises rates for other customers.
The government has instructed the energy regulatory body, Régie de l'énergie, to take five concerns into account when developing a policy: defining a new category of electricity consumers and blockchain-specific rates; the need to reserve energy for those consumers; impacts on Hydro-Québec's revenues; winter peaking issues; and the sector's economic impacts, largely with respect to job creation.
Due to power and cooling needs of cryptocurrency miners, they tend to locate in areas with inexpensive electricity or natural cooling. Iceland has become a popular location.
Some communities in upstate New York faced higher rates after miners moved to the area for its cheap hydroelectricity. Earlier this year in Plattsburgh, N.Y., regulators said average residential bills jumped $10/month because of two cryptocurrency companies operating there.
The Public Service Commission has allowed municipal utilities to create tariffs which focus on high-density load customers like the mining operations. Those customers must have a maximum demand exceeding 300 kW and a load density that exceeds 250 kWh per square foot per year.
