IE 11 Not Supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Chelan County, Wash., Ramps Up Rates for Bitcoin Server Farms

Representatives of Bitcoin-mining businesses told Public Utility District staff and commissioners that this rate, over time, would put them out of business.

(TNS) -- Chelan County, Wash., Public Utility District (PUD) commissioners Monday capped an 18-month public discussion by approving new rates and service conditions for energy-intense server farms, including Bitcoin operations.

None of the Bitcoin-focused business owners who have participated in discussion and negotiation of the new rates and conditions were present for the unanimous vote.

The new “high-density load (HDL)” rate classification is called “Schedule 35.” It applies to customers whose operations consume 250 kilowatt hours of power per square foot of operational floor space per year, but require less than 5 average megawatts of power at any time.

HDL customers must pay upfront for all the capital costs the PUD incurs for higher-capacity equipment needed to deliver power to the customer’s location.

This up-front capital charge is in addition to the usual distribution costs included in their monthly rate.

The new rate is made up of more components than the residential rate, making a direct comparison difficult, officials say. It is designed so these high-density power users will pay the entire cost of receiving their electricity. The PUD’s residential and commercial customers pay below cost for the power they receive.

The new rate includes a basic monthly charge of from $130 to $860 per meter, depending on energy demand. There is an additional monthly demand charge of $5.50 per kilowatt, and an energy charge of 2.70 cents per kilowatt hour. It takes effect starting Jan. 1.

Customers who had invested at least $500,000 in high-intensity businesses that were operational before Dec. 15, 2014 will transition gradually to the new, higher rate over five years.

These conditions were the result of public discussions, at times contentious, that sprung from an original PUD proposal to charge these high-density customers 4.5 cents per kilowatt hour.

Representatives of Bitcoin mining businesses told PUD staff and commissioners that this rate, over time, would put them out of business.

The HDL rate discussion began in December 2014, after PUD staffers noticed a sharp increase in inquiries for large amounts of PUD power. Commissioners approved a moratorium Dec. 15 on new high-power hookups to give staff time to study the reason for the spike in inquiries and how to best deal with it.

They discovered that server farms that process the all-digital experimental currency Bitcoin, and other types of “cryptocurrencies” had discovered North Central Washington’s cheap electricity. These firms’ largest expense is power.

Commissioner Dennis Bolz said the new rate allows the utility to serve HDL customers in a sustainable way that doesn’t harm other ratepayers. “It’s a good product,” he said.

Commissioner Garry Arseneault commented that the absence of HDL customers in the boardroom the day of the vote was proof that these customers “are not in conflict” with the new rate.

©2016 The Wenatchee World (Wenatchee, Wash.) Distributed by Tribune Content Agency, LLC.