Pieces Of Electricity Prices For Crypto Miners In Kentucky Protes Environmental Activists, This Is The Reason

Crypto mining companies in Kentucky get price relief. (photo; dock. coindesk)

JAKARTA - The Kentucky Public Service Commission (PSC) has reportedly opened a formal investigation into two proposed contracts that will offer electricity discounts for new crypto mining operations.

According to a December 5 statement from environmental law group Earthjustice, the government department will seek to determine whether subsidizing crypto mining operations will increase electricity costs for Kentucky residents.

Two mining contracts under investigation include Kentucky Power and Ebon International LLC, which runs a 250-megawatt mining facility in Louisa, as well as mining company Bitki-KY, which operates a 13-megawatt facility in Waverly, Kentucky.

The contract proposes to discount electricity prices to the Ebon Facility, while Bitki-KY has received a $250,000 tax credit from the Kentucky state following the ratification of Kentucky tax relief bills for local crypto miners.

Earthjustice argues in its statement that crypto mining is "very intensive and exponentially with an energy-intensive design" and that discount rates for the facility "can generate higher electricity bills for the residents of Kentuckian daily."

A senior lawyer for the environmental group, Thomas Cmar, said he was "anticipating the upcoming hearing and discovery process so that the residents of Kentuckian can find out exactly what they will pay for by subsidizing this facility."

"I hope the Commission will see the void promise of these cryptocurrency mining companies that they will benefit the local community and provide more oversight of contracts like this in the future," Cmar said as quoted by Cointelegraph.

"Cryptocurrency mining is an industry that is largely unregulated and very energy intensive that can cost the Kentuckian people a lot of daily expenses," he added.

The group also claims that crypto mining companies rarely create jobs due to the highly automated nature of mining operations.

Lane mainman, executive director of the Kentucky Conservation Committee's environmental advocacy group, added that the cost burden related to the construction of new crypto mining facilities often affects ordinary people because everyone's electricity bill goes up to cover costs.

Kentucky has become a hotspot for crypto mining companies, which are now reported to account for 20% of the country's computer power for proof of work mining activities, which ranks second among all US states after New York.

But while many environmental groups want Bitcoin (BTC) and other proof of work blockchains to switch to proof of ownership (proof of stake) due to energy concerns, the Bitcoin Mining Council recently published a report showing that Bitcoin could soon become a zero-emission network with burn stranded methane gas to mine BTC which should be emitted into the atmosphere.

Cointelegraph contacted PSC for confirmation and details behind the investigation but has not received an immediate response.

Earthjustice noted that they collaborated with the Kentucky Resources Council to make comments on behalf of the Kentucky-based broad coalition of environmental groups and asked PSC to investigate the matter.