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Crypto mining in Texas could be costing energy customers an extra $69 per year on their electrical bills

Will Gendron   

Crypto mining in Texas could be costing energy customers an extra $69 per year on their electrical bills
  • Texas has become home to crypto mining companies due to the state's cheap electricity.
  • The energy involved in these operations has increased costs for power customers across the state.

If you live in Texas and noticed your energy bill has risen over the past year, cryptocurrency mining might be one contributing factor.

Since 2021, a number of bitcoin mining companies have moved to Texas, and they are causing an uptick in energy consumption that could lead to a 5% annual increase in electric bills for Texas power customers — or an extra $1.8 billion per year — according a simulation performed by energy research and consulting firm Wood Mackenzie for The New York Times.

When considering the more than 26 million customers on Texas' Electric Reliability Council of Texas, or ERCOT, that's an extra $69 per annual bill.

The costs show how the presence of crypto mining in the state is impacting all of the state's residents.

Riot Platforms, which runs the state's largest mine in Rockdale, uses the same amount of electricity as the nearest 300,000 homes, per the Times.

"The alleged increase in energy bills was created using a proprietary black box simulation, not real-world data, and the NYT and their sources have not made the data available to the public so that it can be appropriately challenged," a Riot Platforms spokesperson told Insider.

The company did not respond when asked to detail the amount of energy it uses.

In 2021, China cracked down on crypto. Financial institutions and payment companies were banned from facilitating cryptocurrency transactions in May of that year, and just four months later, another ban was issued that prevented crypto transactions and crypto mining in the country, per Reuters.

Crypto mining companies needed to move elsewhere, and some rural counties in Texas welcomed these companies.

Milam County, for example, which was home to a once-thriving aluminium plant that closed in 2008, offered Riot Platforms "a 45% discount on local taxes for 10 years," per the Texas Tribune.

Plus, the state's inexpensive electricity costs made it a desirable location for these companies, Carey King, the assistant director of the Energy Institute at The University of Texas at Austin, told Texas Observer.

However, the energy required to mine crypto — which involves a number of interconnected servers solving increasingly difficult mathematical problems — is significant. Not only does the machinery that processes crypto-related transactions require energy, but these data centers also have to be cooled down.

The energy costs associated with these trickle down to everyday Texans, who are already seeing their electric bills increase due to severe weather swings that have put pressure on the state's energy grid.

"Texans have continued to experience high electric bills due to a number of factors," an ERCOT spokesperson told Insider.

The spokesperson cited weather and fuel prices as the main reasons for increased electric bills.

In February 2021, arctic weather swept across the state, leading to increased demand for power in order to maintain heating in residents' homes, which caused state-wide blackouts. Then, in July 2022, mining companies were urged to wind down operations in order to lower the strain on the energy grid as temperatures rose across the board, threatening the possibility of power outages.