Miners have pocketed an estimated $170 million by participating in demand response
AUSTIN, Texas – A bill that would have limited the crypto mining industry’s participation in the state’s demand response program and certain tax giveaways has failed as the Texas Legislature nears the end of its regular session.
Senate Bill 1751 by Republican state Sen. Lois Kolkhorst missed a Saturday night deadline to advance from its House committee. It is considered dead for the current legislative session, which will conclude on May 29. Adrian Shelley, Texas director of Public Citizen, issued the following statement:
“The crypto industry has taken advantage of Texas and has been rewarded with millions of dollars while wasting vast amounts of electricity that Texans need. The money the state is paying miners could instead be used to invest in energy efficiency programs that stabilize the grid and bring energy bills down. The needs of an industry that produces no real product and puts an added strain on the state’s electric grid must come second to Texas’ energy needs and its taxpayers. The Legislature’s inaction will continue this exploitation of everyday Texans.”
Crypto miners can receive an estimated $170 million from the state per year for simply enrolling in the demand response program, which pays the miners more when ERCOT, which manages the state’s electric grid, asks them to shut down to reduce strain on the grid. The energy-hungry industry can essentially profit from a situation it helps create.
SB 1751 would have capped the industry’s participation in demand response at 10 percent. The bill also excluded crypto miners from property tax breaks under the state’s Chapter 312 program and required the mining facilities to register with the state.
A recent New York Times investigation highlighted the strain crypto miners place on the Texas grid and how it impacts energy bills. Among the paper’s findings:
- 5% increase in electric bills. 10 large-scale Bitcoin mining operations in Texas have accounted for ratepayers’ electric bills rising by 5% annually.
- $1.8 billion per year. Cost to Texas ratepayers of higher bills from Bitcoin mines. $60 million for demand response. Bitcoin miners participate in the Texas demand response program. Taxpayers are paying miners to remove the demand they added to the grid. By participating in the state’s demand response program, 5 of the 10 large-scale operations have pocketed a combined $60 million since 2020 from ERCOT by participating in the program.
- $18 million windfall during Winter Storm Uri. Winter Storm Uri in February 2021 was particularly profitable for one company. The Bitdeer facility near Austin was told to shut down for four days, during which Bitdeer received $18 million in taxpayer dollars.
- According to the Times, the Riot Platforms facility in Rockdale is the “most power-intensive” Bitcoin operation in the country. It is estimated the facility consumes “about the same amount of electricity as the nearest 300,000 homes.”
- The Bitdeer facility neighbors Riot. The two facilities consume as much power as all the households “within a 40-mile radius.”
Absent a special session, the next opportunity for the Legislature to address this issue will be January 2025.