Courts agree with power company over transaction processors’ rate hike

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In 2018, the Grant County public utility district (PUD) in Washington State determined that transaction processors, aka miners, in the digital currency industry should pay more than other businesses. In September of that year, they set a rate of electricity consumption on miners that would ultimately be 50% higher than the norm, much to the irritation of operators in the space. It didn’t take long for the PUD to be hit with at least one lawsuit in response to the increase and, a year later, the case has finally been decided.

The plan was to increase energy rates for transaction processors by 15% in 2019, another 35% this year and, finally, another 50% in 2021. The justification for the higher rate came from the PUD’s assertion that it had received a number of new power requests for amounts above 2,000 megawatts, which it said was “more than three times the electricity needed to power all Grant County homes, farms, businesses and industry.”

Not happy with the added expense, the operators got together and sued the PUD. The issue has finally made its way to the top of the stack and was heard by Judge Rosanna Peterson, a judge in the U.S. District Court for the Eastern District of Washington. She handed down her ruling last Thursday, siding with the PUD because the plaintiffs weren’t able to concretely show which laws had been broken by the utility. Specifically, they had claimed the rate increase violated the Federal Power Act (FPA), but they didn’t show how it violated the law.

The FPA is designed to prevent discriminatory and unreasonable electricity rates; however, it doesn’t prevent utility companies from charging different rates to different industries. Judge Peterson acknowledged this in her ruling, adding that the utility has the right to charge different rates.

It may be a victory for the PUD, but it’s possible that it could still be found in violation of laws. This lawsuit charged the utility under federal guidelines, but there is another case pending that accused it of breaking Washington State laws. The victory on one side does not necessarily guarantee a victory on the other.

Transaction processors began setting up shop in Washington State in 2017 because, at the time, it offered some of the most affordable electricity rates around. The Grant County PUD is alleged to have tried to take advantage of the migration and the establishment of the industry in the state to line its own pockets, using the added expense as an excuse and not basing it on any study or educated analysis.