As cryptocurrency comes predictably crashing down, the Public Utilities Commission is encouraging crypto-scammers to come mine their imaginary gold here in South Dakota with cheaper electricity rates:
The South Dakota Public Utilities Commission gave its approval on Thursday to the request from Montana-Dakota Utilities. According to the company, a 40-foot container for bitcoin-type processing typically uses 1 megawatt of electricity.
“The new rate schedule is being proposed in response to recent inquiries for electric service to facilities housing blockchain technology where the load characteristics of such facilities far exceed those of a typical general electric service customer today and whose unique operations require terms and conditions specific to these customers,” MDU said in the application [Bob Mercer, “SD Regulators Okay New Rate MDU Wants for Data Centers,” KELO-TV, 2023.01.05].
The PUC docket does not make clear exactly what the new rate for crypto-mining data centers, “High Density Contracted Demand Rate 45“, will be. However, MDU’s initial application letter indicates Rate 45 is a lower rate that will pay off in economic development for local communities:
The rate schedule provides potential customers with an innovative pricing structure and outlines the terms and conditions which a customer must adhere to in order to be eligible for service under the rate schedule.
…the communities in which these Rate 45 customers locate will benefit through not only the employment opportunities needed to operate such facilities, but the additional tax revenue received due to these facilities locating in their communities [Travis R. Jacobson, director of regulatory affairs, Montana-Dakota Utilities, letter to Public Utilities Commission, 2022.09.21].
MDU told the PUC in December that “The impact of data center loads will likely increase the energy cost for other customers.” However, MDU says the increase will be “minimal” and could be offset by additional wind power generation.
Whatever the cryptominers have to pay, let’s just hope MDU and the PUC require that they pay in real dollars.