Nine crypto firms oppose fare hike in Washington county

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The Grant County public utility district (PUD) reported that nine cryptocurrency firms have filed suit at the U.S. District Court of Eastern Washington for imposing an “evolving industry” rate that targets mining operations.

In the bulletin for its latest meeting, the Grant PUD said its commissioners had agreed to cover legal costs for themselves and employees, in relation to the case, which alleges that the utility district had “acted inappropriately” in the approval of the new rate.

“Grant PUD is in the process of filing a response to the suit,” the bulletin read.

The approved fare hike is supposed to take effect on April 1, increasing power rates for cryptocurrency firms by 15%. This is scheduled to go up by another 35% in 2020, and another 50% in 2021.

The impetus for the scheme was the sudden increase in service requests beginning in the summer of 2017, whose output totaled 2,000 megawatts. 75% of such requests were said to have come from cryptocurrency firms.

The rate increase was first agreed upon last May. With rates for cryptocurrency companies rising, it was claimed that this would create greater certainty of costs and waiting periods.

The new rates have been calculated as high enough to cover not just providing of electricity, but risks posed to the utility’s other customers. “Similar to the pricing for current large industrial customers, the new policy requires these emerging businesses to pay more, so core residential, irrigation and commercial customers can continue to pay below-cost rates,” Grant PUD said.

The “evolving industry” rate targets businesses

– whose revenue comes mainly from “evolving and unproven” sources;
– whose ability to pay long-term is uncertain;
– who are vulnerable to great fluctuations of output;
– who face risk of further adverse regulation; and
– who could make for a large concentration of demand for power in the area.

These companies will be placed in a secondary waiting queue for service, with traditional and industrial customers’ applications processed ahead.

Grant PUD generates electricity from various sources, including hydropower and wind power.

Last year, the Chelan and Franklin county PUDs, also in Washington, moved to allow for the refusal of applications from digital miners.

It is questionable whether such rate increases are needed at present, with the number of lucrative mining operations already shrinking over the past year, in the wake of falling cryptocurrency prices.