PLATTSBURGH — The City of Plattsburgh Common Council is considering a new law, that combined with a state tariff structure, would regulate cryptocurrency operations.
A public hearing is set for 5:01 p.m., Thursday, Oct. 25, in City Hall Chambers, 41 City Hall Place.
Comment is invited on a proposed local law that would:
• End the moratorium that was put in place in late February to forestall any additional commercial cryptocurrency operations for an 18-month period while the city studied the issue.
• Ensure all new cryptocurrency operators follow health, safety and nuisance-prevention regulations.
Cryptocurrency — digital currency such as Bitcoin — is mined using banks of computers that run complex algorythims for hours and hours at a time, using massive amounts of energy and throwing off tremendous amounts of heat.
"The public is well aware that the cryptocurrency industry has been relying heavily on the city’s cheap industrial power rates," a press release from the city said.
Plattsburgh's Municipal Lighting Department buys inexpensive hydropower from New York Power Authority operations on the St. Lawrence River, which accounts for the city's extremely low rates.
But when that allotted hydropower is used up, MLD has to purchase more on the open market.
Earlier, Mayor Colin Read said the price can be seven times higher, and that hike in cost must be borne by all ratepayers in the city.
That happened in December 2017 and then January this year; some MLD customers reported spikes of as much as $300 per month.
Bitter cold over that period contributed, the city said then, but two cryptocurrency operations were using more power than even all of the Georgia-Pacific plant.
On top of their unwelcome effects on electric rates, the cryptocurrency businesses generated complaints of noise, nuisance and heat-wastage from neighbors and other citizens, the city said.
And there have been concerns about the safety of those operations.
"The city, and other similarly concerned municipalities, were successful in petitioning the Public Service Commission to impose a new tariff structure that requires the cryptocurrency industry to pay for the entire amount of electricity quota overages they induce," the release said.
Earlier this year, the PSC adopted a special tariff — called Rider A — that allows the city's MLD to pass any quota overages — and associated higher rates — on to the commercial cryptocurrency mine operators.
"No longer would other ratepayers have to pay for a problem of the cryptocurrency industry’s creation," the release said.
There remained other concerns, though, centered around nuisance, safety and noise.
In late February, the city adopted a moratorium to forestall any additional commercial cryptocurrency operations for an 18-month period while those issues were under study.
An advisory committee of stakeholders was appointed "to formulate appropriate and reasonable protections for the community," the release said.
"The result of these efforts is a proposed local law which defines this activity, requires fire suppression within a contained structure, imposes heat and noise limits, and enacts zoning changes so that these mines would only be allowed via a special use permit within an industrial zone."
TO DO NO HARM
"This is a novel and dynamic industry that caught this and many other municipalities by surprise when it arrived in 2016," Read said in the release.
"Once the negative effect became known in early 2017, we knew that what would be necessary is a series of regulations that ensures the industry does no harm to ratepayers or community members.
"The combination of our petition to the New York State Public Service Commission and these sensible proposals to modify our local laws should protect our citizens and act as a model for other municipalities around the country and the world that are trying to cope with such rapid growth of this industry in their communities."
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