Thursday, February 21, 2019

NYPSC Approves Higher Rates for Bitcoin Miners

The New York Public Service Commission on Thursday ruled that upstate municipal power authorities can charge higher electricity rates to cryptocurrency companies in order to prevent disproportionate increases in local retail rates.

The intense computer processing by cryptocurrency companies, such as Bitcoin miners, requires large amounts of electricity, prompting them to move their server farms upstate for the relatively cheap hydropower.

The order (18-E-0126) cited the situation in Plattsburgh, where monthly bills for average residential customers increased nearly $10 in January because of two cryptocurrency companies operating there.

The New York Municipal Power Agency, an association of 36 municipal power authorities in the state, petitioned the commission regarding concerns that these high-density load customers were having a negative impact on local power supplies.

Cryptocurrency companies look for commercial or industrial facilities where they can access the large amounts of power required for their banks of computers to create — or “mine” — digital currency.

Rhodes | © RTO Insider

The commission “must ensure business customers pay an appropriate price for the electricity they use,” said PSC Chair John B. Rhodes. “This is especially true in small communities with finite amounts of low-cost power available.”

In some cases, such currency miners account for 33% of a municipal utility’s total load, an “extraordinary amount” of power for a single customer to use, the commission said. By comparison, a large paper manufacturer employing hundreds of workers might use one-quarter the amount of electricity per square foot of such customers.

PSC Slashes National Grid Electric Rate Increase

The PSC approved three-year electric and gas rate plans for National Grid that came up far short of the company’s requests.

The ruling (17-G-0239) limits electricity revenue increases in the first year to only $43 million (1.7%), rather than the $326 million (13%) sought by the utility. Natural gas revenue increases in the first year were capped at $13 million (2.4%), compared to the requested $81 million (14%).

A typical residential customer using 600 kWh of electricity per month under the new rate plan would see a total monthly bill increase of $2.22 (2.9%) in the first year starting in April 2018, $3.03 (3.8%) in the second year and $3.25 (3.9%) in the third year. Eligible low-income electric customers will see a bill reduction of up to 55%.

The plan “includes a nation-leading affordability policy that substantially lowers bills for most low-income customers,” Rhodes said. “It moves forward the state’s climate agenda by expanding energy efficiency while funding non-wire alternatives and other REV-like initiatives for smarter investments.”

PSC Continues Crackdown on ESCOs

The commission ruled to restrict three energy service companies (ESCOs) from serving low-income customers while granting a fourth company its petition to serve them after demonstrating that it could guarantee a 1% savings against the utility price.

The March 15 actions (17-G-0239) included suspending the ability of Flanders Energy to market to and enroll new residential and nonresidential customers and directing the company to refund any overcharges to customers that it enrolled without proper authorization. Flanders does business in Consolidated Edison’s service territory.

The commission also denied separate petitions from Drift Marketplace and M&R Energy Resources for rehearing on original orders denying the companies’ requests to serve low-income customers. Neither company was able to demonstrate how it was going to guarantee savings, the rulings said. Drift does business in Con Ed’s territory, while M&R operates in the Central Hudson Gas & Electric and Orange & Rockland Utilities areas.

“Our ongoing efforts to reform the ESCO market remains a priority,” Rhodes said. “In instances where an ESCO proves they are fair to customers, we allow them to continue their activities in New York to bring choice and energy services to customers.” (See NYPSC Limits ESCO Service, Sets New DER Compensation.)

The commission approved New Wave Energy’s petition, which stated the company will immediately assign all its customers that participate in the utility assistance program to its guaranteed savings product. New Wave operates in the National Grid, New York State Electric and Gas, National Fuel Gas and Rochester Gas & Electric service territories.

The state’s Department of Public Service has provided evidence that many ESCOs have been significantly overcharging many mass market customers. It has also found many ESCOs have abused customers via high-pressure and deceptive sales tactics, teaser contracts and exploiting vulnerable elderly, immigrant and low-income populations.

PSC Approves Tier 2 Changes to CES

The PSC expanded Tier 2 of the state’s Clean Energy Standard, changing Maintenance Tier eligibility to include certain renewable facilities in operation prior to Jan. 1, 2015, and establishing delivery requirements into New York consistent with those for Tier 1.

The order (15-E-0302) applies only to eligible, pre-existing renewable facilities and expands the number of projects eligible for funding under the program in cases of need. The commission also increased the size threshold for eligible existing hydropower facilities from 5 MW to 10 MW, and provided for a streamlined review process, as well as a standard contract term of three years with the potential for contract renewals.

The commission said the changes will reduce the administrative burden on facilities seeking maintenance support and will better reward the environmental contributions of existing baseline renewable resources.

PSC Hems on Public Policy Tx Planning

The commission on Friday declined to identify and refer any public policy transmission planning requirements to NYISO.

The March 16 order (16-E-0558) directed DPS staff to work with the ISO and the New York Transmission Owners to identify potential transmission constraints on the bulk and non-bulk systems that may warrant the future identification of a public policy requirement, considering current and projected resources.

bitcoin mining cryptocurrency ny psi


The commission said that while it “recognizes that there are certain regions, such as the northern and southwestern parts of the state, where additional transmission facilities may support the deployment of renewable resources, the extent and magnitude of such needs requires further consideration.”

NYISO’s Tariff, approved by FERC, says that the PSC may identify which public policies, if any, constitute requirements; if the commission identifies such a need, the ISO will then solicit and evaluate proposed solutions to it.

— Michael Kuser