The city now has a budget of 104 megawatt-hours per month; if it exceeds that, Plattsburgh is forced to buy electricity on the open market. Motherboard has noted that Coinmint operates in the biggest Bitcoin mining operation in Plattsburgh, and apparently used about 10 percent of city's total power budget in January and February.
Plattsburgh major Colin Read has stated before that residents in the area have the "cheapest energy in the world". As a result, Plattsburgh has been forced to purchase more electricity on the open market at higher prices.
In December and January, Plattsburgh went over its allotted hydro amount causing residents' bills to skyrocket.
The commission's decision follows a petition from the New York Municipal Power Agency (NYMPA), a body made up of 36 municipal power authorities, which "represents customer-owned municipal electric systems that acquire low-priced power, typically hydro, and distribute the power to customers at no profit".
Cryptocurrency mining is an energy-intensive process that generates tokens and validates transactions on a blockchain by running processor-intensive computations, normally using specialized chips. Its proximity to the lake also means Plattsburgh is able to enjoy low-priced hydroelectric power, making it extremely attractive to large-scale crypto-mining operations.
The low cost of electricity has enticed a number of mining operations to set up shop, but the reduced cost for commercial electricity wasn't meant to support these power-hungry enterprises. The is located near a hydroelectric dam on the St. Lawrence river that keeps electricity costs for residents down to about 2 cents per kilowatt-hour-just a fraction of the USA average of over 10 cents per kilowatt-hour. The city also charges industrial enterprises only 2 cents per kilowatt per hour as an incentive for companies to move to Plattsbugh.
The Moses-Saunders Power Dam on the St. Lawrence River.
It's easy to see why mining operations are attracted to the city. This doesn't apply to companies that are already in operation, but the city won't let any new commercial operations start mining for the time being. During the 18-month moratorium, the city will work with residents and commercial cryptocurrency miners to come up with a solution, like applying overages on miners when the city's power budget is exceeded, according to Motherboard. Just two of the registered miners accounted for around 10 to 15 per cent of the city's entire power consumption, we're told. The effective date of the moratorium has yet to be approved.