Kentucky to investigate contracts providing discounted electricity prices to cryptocurrency miners | The Financial Express

Kentucky to investigate contracts providing discounted electricity prices to cryptocurrency miners

According to Cointelegraph, Earthjustice stated that the government department aims to determine whether subsidising cryptocurrency mining operations will result in the increment of electricity costs for Kentucky residents

Kentucky to investigate contracts providing discounted electricity prices to cryptocurrency miners
It is believed that Earthjustice entered into a partnership with the Kentucky Resources Council to give filings of comments for a coalition of Kentucky-based environmental groups

Kentucky Public Service Commission (PSC) has reportedly started a formal investigation around two proposed contracts that are expected to provide discounted electricity prices to new cryptocurrency-mining operations, as reported by Cointelegraph.

According to Cointelegraph, through a December 5, 2022, statement, Earthjustice, an environmental law group, stated that the government department aims to determine whether subsidising cryptocurrency mining operations will result in the increment of electricity costs for Kentucky residents. It is believed that the contract aims to facilitate discounted electricity rates to the Ebon Facility, while the Bitki-KY has already secured a $250,000 tax credit from the state of Kentucky post the passing of a Kentucky tax break bill for local cryptocurrency miners. 

“I’m hopeful that the Commission will see these cryptocurrency mining companies’ empty promises that they will benefit local communities […] and give more scrutiny to contracts like these in the future. Cryptocurrency mining is a largely unregulated and highly energy intensive industry that could cost everyday Kentuckians big,” Thomas Cmar, senior attorney, Earthjustice, stated.

On the basis of information by Cointelegraph, the group made the claim that cryptocurrency mining operations rarely provide employment opportunities on account of the mining operations’ automated nature. Lane Boldman, executive director, Kentucky Conservation Committee, an advocacy group, stated that the pressure around costs of developing new cryptocurrency mining facilities “often lands on everyday people” as “everybody else’s electric bills go up to cover the costs.”

Moreover, Cointelegraph noted that Kentucky reportedly contributes towards 20% of the country’s computer power around proof-of-work mining activities, which has the second ranking among all US states after New York. It is believed that Earthjustice entered into a partnership with the Kentucky Resources Council to give filings of comments for a coalition of Kentucky-based environmental groups, and requested for the PSC to investigate the concern.

(With insights from Cointelegraph)

Also Read: Cryptoverse: Forget crypto winter, this is a bitcoin ‘bloodbath’

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First published on: 06-12-2022 at 16:25 IST