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On Wednesday, the New York State Public Service Commission (PSC) ruled that municipal power companies could charge higher electricity rates to cryptocurrency miners who try to benefit from the state's abundance of cheap hydroelectric power.
Over the years, Bitcoin's soaring price has drawn entrepreneurs to mining. Bitcoin mining enterprises have become massive endeavors, consuming megawatts of power on some grids. To minimize the cost of that considerable power draw, mining companies have tried to site their operations in towns with cheap electricity, both in the US and around the world. In the US, regions with the cheapest energy tend to be small towns with hydroelectric power. (Politico recently wrote extensively about the Bitcoin mining boom in Washington state's mid-Columbia valley, a hotspot for cheap hydro.)
But mining booms in small US towns are not always met with approval. A group of 36 municipal power authorities in northern and western New York petitioned the PSC for permission to raise electricity rates for cryptocurrency miners because their excessive power use has been taxing very small local grids and causing rates to rise for other customers.
[...] Ultimately, the PSC decided that municipal power authorities will be allowed to increase rates for customers whose maximum demand exceeds 300kW or whose load density "exceeds 250kWh per square foot per year."
Singling out a power-hungry industry for rate increases isn't without precedent. In Boulder County, Colorado, for example, marijuana growers are charged an extra $0.0216 per kWh because they use so much power to run grow lights, ventilation systems, and air conditioners for their plants.
Source: Ars Technica
(Score: 5, Insightful) by Anonymous Coward on Sunday March 18 2018, @09:21PM (59 children)
Tiered pricing relative on what you use your power for is a bad road to go down.
(Score: 2) by wonkey_monkey on Sunday March 18 2018, @09:27PM (43 children)
It's either this or everybody has to pay more because of the stress a minority of users are placing on the grid.
systemd is Roko's Basilisk
(Score: 5, Insightful) by KiloByte on Sunday March 18 2018, @09:50PM (5 children)
While this particular use is not worth praise, changing the rules to drop power neutrality will immediately get abused.
Go enough this way, and your power bill will increase for the time you used your computer to watch porn (and you'll be required to install appropriate monitoring so you can be billed accordingly).
Ceterum censeo systemd esse delendam.
(Score: 5, Informative) by Pino P on Sunday March 18 2018, @10:16PM
As described in the summary, the PSC's ruling still appears neutral: A subscriber drawing unusually large peak power (300 kW per subscriber) or sustained intensity (250 kWh/ft2/year, or equivalently 307 W/m2) will get surcharged.
[ Showing my work: 250 kWh/ft^2/year * (1000 W/kW) * (1 ft/.3048 m) * (1 ft/.3048 m) * (1 day/24 h) * (1 year/365.2425 days) = 307.0 W/m2, which is in units of intensity [wikipedia.org]. ]
(Score: 1) by RandomFactor on Sunday March 18 2018, @10:52PM
Maybe I'm not thinking right, but I've just never been interested in crypto coin that proved someone did a meaningless calculation.
OTOH there's some Gridcoin projects that might get my cycles if I ever wanted to burn my CPU/GPU/power, at least the computing power actually accomplishes something.
В «Правде» нет известий, в «Известиях» нет правды
(Score: 3, Touché) by FatPhil on Monday March 19 2018, @11:58AM (2 children)
There'll be an extra-low "family" tariff for those who maintain "family values" in their computer use habits, and in order to qualify for the discount you'll need to install the monitoring app. Of course the burdon this will place on the energy company's income will mean that prices will have to go up across the board. But no, there will never be a penalty for watching porn, of course not, that would be absurd.
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by Bot on Tuesday March 20 2018, @04:26PM (1 child)
>Of course the burdon this will place...
please don't let you be misunderstood ;)
Account abandoned.
(Score: 2) by FatPhil on Tuesday March 20 2018, @04:37PM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2, Interesting) by khallow on Sunday March 18 2018, @09:56PM (35 children)
In practice, having large buyers usually works out well for the small buyer (for example, construction materials, electronic components, food, paper, etc). They stress those markets, sure, but they also provide economies of scale for the supplier of the good in question. Maybe we should be looking at what is broken in the New York electricity market instead?
As an aside, one bad consequence of this sort of law is that now the electricity company has a reason and power to know what you are using your electricity for which they wouldn't have in a use-agnostic market.
(Score: 4, Interesting) by sjames on Sunday March 18 2018, @10:09PM (26 children)
Those towns are trying to encourage employers to move in by keeping power costs low. But bitcoin miners don't tend to employ many people, so they were just riding in on the coattails.
And no, the power company doesn't get to audit what you do with the power, the law uses power density as it's metric.
It's not at all uncommon when expansion would be very costly or infeasible to charge more to heavy users of a resource, or atlernatively charge less for people who limit their use as a reward.
(Score: 2, Insightful) by khallow on Monday March 19 2018, @04:29AM (25 children)
Poor ideas result in poor outcomes. What businesses are going to decide to move in just because of low electricity prices? It's only electricity-intensive businesses like cryptocurrency or aluminum smelters miners that would be attracted in the first place. And it's not fair to say that they were "riding in on the coattails" when they were the businesses that would be attracted by low electricity prices.
Which let us note is an easy metric to game. At that point, what's next? It's typical regulatory thrashing after creation of an easily exploitable public good (the electricity subsidy) in feeble attempts to deal with the resulting tragedy of the commons.
Or the electricity company can just buy huge amounts off the grid, which wouldn't be a problem, if they were charging market rates for their electricity.
(Score: 2) by sjames on Monday March 19 2018, @06:02AM (22 children)
You do realize that different sources of electricity cost different amounts, right? That's why so many companies try to shave peaks through various surcharges and discounts. So big fat surprise, as long as demand can be met by a local hydro plant, the cost of electricity is low, but if they're forced to fire up a gas turbine plant, it costs more.
And no, power density is not easy to game. You have X property and Y power consumption. You MAY be able to buy/lease adjacent land, but then you have a significant extra expense including property taxes.
(Score: 1) by khallow on Monday March 19 2018, @08:34AM (21 children)
Not relevant here. Floating prices based on overall demand is very different from selectively billing "high density" users extra.
Or that's 10X property (either obtained by throwing up cheap real estate or adding a bunch of relatively cheap farmland). Which would then allow you to do 10Y power consumption. More likely, they'll just buy power or rent space with other qualifying businesses in the area. If all your local restaurants have bitcoin mining operations in the basement, what exactly are the utilities going to do about it?
But what's really silly about the whole thing is that the miners are useful to have around since they have really predictable, smooth demand. You just don't want them drawing power at peak load. The whole thing would be solved with tiered power where power is cheap at off times (like 2am) and expensive at 5pm. Smart meter the whole operation and don't lose sleep over it.
They're lucky here that the cryptocurrency miners aren't politically influential. Else that Commission might well be a tool for the miners rather than for the utilities.
(Score: 2) by sjames on Monday March 19 2018, @05:19PM (20 children)
If they are renting from every business in town, they will be injecting money into the local economy, objective achieved!
(Score: 1) by khallow on Monday March 19 2018, @05:51PM (19 children)
(Score: 2) by sjames on Monday March 19 2018, @10:27PM (18 children)
Care to support that bald assumption?
(Score: 1) by khallow on Monday March 19 2018, @11:38PM (17 children)
Because they're already doing that. We started with creation of a public good, electricity subsidies for businesses, followed up with ham-handed rate increases for specific usage cases (high consumption density) because people aren't using the public good like expected. But if they hadn't done this in the first place, then they wouldn't have the problems.
What's particularly stupid about the whole thing is that their neighbors have already solved this. Pennsylvania and Ontario both have schemes that would keep cryptocurrency mining from becoming a problem.
(Score: 2) by sjames on Tuesday March 20 2018, @02:44AM (16 children)
So you propose that due to a subspace rupture, future and present are one there so that they are already doing something you predict they will do and you predict they will eventually do it because they are doing it right now in the future?
(Score: 1) by khallow on Tuesday March 20 2018, @05:01PM (15 children)
(Score: 2) by sjames on Wednesday March 21 2018, @01:24AM (14 children)
Then you're assuming they will choose the worst possible approach and beating the rush by condemning them for it now.
Of course, that is predicated on the current plan actually failing. No evidence is offered that it will fail. It's a whole straw army!
(Score: 1) by khallow on Wednesday March 21 2018, @06:46AM (13 children)
After you've seen these games played out repeatedly, it's not that hard to see failure coming.
(Score: 2) by sjames on Wednesday March 21 2018, @09:23AM (12 children)
Sorry, you don't get to claim your crystal ball gazing as if it was fact. Tiered power billing is quite common across the U.S. Keep in mind, I can fairly say I have never seen a free market economy that didn't eventually implode. If you object claiming some economy or another hasn't imploded, I'll just add yet and declare victory.
Meanwhile, NY has made it clear that they don't intend to offer cheap power to bitcoin miners. They'll take the path of least resistance and find somewhere else.
Or they'll rent from all of the local businesses and support the local economy that way.
(Score: 1) by khallow on Wednesday March 21 2018, @11:07AM (11 children)
Not in New York where this problem is occurring. Not only did the problem come because of lack of tiered billing, it's being made worse because the sort of tiered billing being employed is based on a terrible approach. As I noted earlier, failure is ongoing.
(Score: 2) by sjames on Wednesday March 21 2018, @11:26AM (10 children)
So they lacked tiered pricing and that was a problem, so they implemented it and that is a problem? Make up your mind! And back it up with something other than your bald opinion.
And tell me, what is your suggestion for tiered pricing that will work so much better?
(Score: 1) by khallow on Wednesday March 21 2018, @05:30PM (9 children)
(Score: 2) by sjames on Wednesday March 21 2018, @06:37PM (8 children)
Except that it is. By pushing demand beyond what the cheap hydro can supply, the miners forced the local co-ops to resort to more expensive power from elsewhere.
That was clearly indicated in TFA.
(Score: 1) by khallow on Wednesday March 21 2018, @09:07PM (7 children)
I never said that utilities had to stick with a bad pricing model. What I've repeatedly opposed is ham-handed, punitive pricing merely because a subsidy got exploited in an unexpected way. This started off on the wrong foot and there's no indication that the utilities and regulator will stop meddling until the exploitation loophole goes away completely.
(Score: 2) by sjames on Wednesday March 21 2018, @11:32PM (6 children)
And closing the loophole is bad why?
(Score: 1) by khallow on Thursday March 22 2018, @12:08AM (5 children)
(Score: 2) by sjames on Thursday March 22 2018, @12:34AM (4 children)
So you claim that a continuously variable rate based on overall demand, time of day, and season for everyone is LESS complicated than a simple power density surcharge where those who will have to pay it already know who they are?
You have an odd definition of complicated.
(Score: 1) by khallow on Thursday March 22 2018, @01:06AM (3 children)
Yes. It's called a market for which pricing information already generates what you want to find out. And it doesn't come with the silly tragedy of commons problems associated with the artificially low prices of the current approach. Once again, keep in mind that the current "simple" power density surcharge is just a first move. Perhaps miners will move on, passing on that cheap electricity. In which case, this rule change becomes a permanent obstacle years or decades from now for a threat that has moved on. I think it more likely that they won't give up on the free money because of some silly rule. In which case, the infrastructure stress will still be present. At that point, it'll be more rules and perhaps more working around those rules.
So what is more complex? Doing it right the first time? Or creating permanent problems and obstructions decades from now because miners were a problem way back in 2018.
(Score: 2) by sjames on Thursday March 22 2018, @03:26AM (2 children)
Wow. You ACTUALLY think that it's simpler that even if you know to the watt-hour how much power you will use, you can't tell what your bill will be? And that it's simpler to use a scheme that requires all new meters that not only measure the total power used in a time period, but record exactly when you use it?
The funny part is that your proposed "solution" doesn't even meet the objective of making the miners bear the entire extra cost of providing them such large amounts of power. Even funnier, you don't seem to understand that it's still the market at work. The miners are free to either pay the new price (presuming they remain profitable) and stay or move to where prices are more favorable to them. It's far closer to a market solution than other places that simply ban commercial bitcoin mining.
There is no magic market faery. Markets must be regulated and managed or things go to hell fairly quickly.
(Score: 1) by khallow on Thursday March 22 2018, @05:43AM (1 child)
What extra cost? Let us keep in mind that a key part of the problem is that the utility was deliberately providing under cost power in the first place. Thus, the key party that should be bearing the cost of the scheme, the utility, is already bearing the cost of the scheme.
[...]
Yet it's a solved problem. Find out how they solved it, smart metering or whatever. And just do that.
(Score: 2) by sjames on Thursday March 22 2018, @04:41PM
The extra cost of buying from the grid rather than relying solely on lower cost hydro for power. It's right there in TFA, they were NOT providing power below cost, they were just able to fulfill demand with lower cost local hydro. That has been pointed out several times, but you keep forgetting it because it provides a reasonable explanation for their current surcharge strategy and eviscerates your complaints.
They solved the problem by having surcharges for heavy power users that stress the local grid..
(Score: 0) by Anonymous Coward on Monday March 19 2018, @09:06AM (1 child)
The problem is not power, but transmission infrastructure. Power companies don't want to build-up their power infrastructure just because some idiot taxes the grid in one place because of magical numbers. You know, the grid is setup for average utilization. Your connection is oversubscribed, just like Internet. Not everyone can use max load at all times.
If you want to mine off-grid with your solar panels, gods speed, gods speed.
(Score: 1) by khallow on Monday March 19 2018, @09:27AM
The grid is set up to handle peak load, not average load. For off-peak times, there's no issue with cryptocurrency mining. Just charge extra to all consumers during peak time and the problem will be nipped in the bud.
(Score: 2) by c0lo on Monday March 19 2018, @02:57AM (5 children)
Partially incorrect: what they use in tiering is your maximal consumption and/or the power intensity (in kwh/area/year).
Considering the externalities such a consumption imply, one may think it is a correct reaction. Otherwise, there's no incentive to invent a cryptocurrency that is less power hungry.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1) by khallow on Monday March 19 2018, @04:41AM (4 children)
(Score: 3, Interesting) by c0lo on Monday March 19 2018, @06:31AM (3 children)
Good.
That will ensure:
- on short term the grid is better balanced and a power-shortage won't cause such a big disruption as those 30 mins in South Korea.
- on medium term, perhaps we'll see some internet/power infrastructure being beefed up in more places than one
- on longer term, perhaps the crypto-currency miners will get to invest in their own energy production capacity. Who knows, maybe they'll even finance some fusion power or in low-power computation or quantum computing research?
So, I hope those municipalities start to charge more for power sooner rather than later.
(grin)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1) by khallow on Monday March 19 2018, @08:39AM (2 children)
We're also missing the benefits of those miners. Just because a utility don't want them mining at peak load, doesn't mean that the utility would similarly not want them mining late night. The whole thing would be eliminated without a fuss, if those miners were charged considerably more for mining at 5pm than at 2am.
(Score: 4, Informative) by c0lo on Monday March 19 2018, @09:46AM (1 child)
Which, of course, will require a distributed processing. Which, of course, will require acquiring the rights to use that space - after a while this will translate in paying some rent to the space owner. Supplementary, the premisses which host those node will need to be wired with optical fiber.
One on top of the other - infrastructure.
I think you are missing some of the crypto-mining specifics -If two miners work on the same workunit, the first to crunch through and convincingly broadcast about it to the distributed database gets the credit, the second gets zilch.
Now, put this together with the "fragmentation" of a miners rig into many "basements" and see what you get.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1) by khallow on Monday March 19 2018, @02:40PM
Already mostly done. Probably would need to run some additional monitoring software for the additional infrastructure needed per installation and to make sure power consumption stays below a minimum amount per unit time.
No, it won't. The current work allotment methods are constant time [bitcointalk.org], no matter how much work is allotted. For example of the discussion from that link:
Moving on:
Mining pools don't work that way. And they wouldn't be coin mining in low cost regions of New York state, if electricity costs didn't matter to them.
(Score: 2) by TheRaven on Monday March 19 2018, @12:15PM (1 child)
Did you miss the part in TFS about hydro power? Hydro has odd economics. A large up-front capital cost (which, in this case, was paid off long ago) followed by a very low per-unit cost up to a fixed maximum limit. Once you go over this limit, you need to buy power from more expensive sources (and most sources are more expensive than hydro). The higher over this threshold you are, the higher the proportion of power that needs to come from other sources and so the higher the per-unit cost.
sudo mod me up
(Score: 1) by khallow on Monday March 19 2018, @02:45PM
So why again, don't they just raise the price when that happens? Oh right, because they have to offer the same low rate no matter how expensive it is to provide that power because of some commission that sets such things.
This is a great target for deregulation and tier pricing by time/season. They should look to how their neighbors in Pennsylvania and Ontario do it.
(Score: 1) by MrBoogers on Monday March 19 2018, @01:58AM
It's this and have other people pay more. I don't see the rise deterring the miners. It's just a cash grab.
(Score: 1, Interesting) by Anonymous Coward on Sunday March 18 2018, @09:52PM (1 child)
First kill net neutrality. Then go after all the utilities.
(Score: -1, Offtopic) by Anonymous Coward on Monday March 19 2018, @12:18AM
(Score: 1, Informative) by Anonymous Coward on Monday March 19 2018, @01:13AM (1 child)
That ship sailed LONG ago. Most states have tiered pricing. Both to encourage job growth and grid balancing. For example many new york city skyscrapers actually crank up the AC during the night. To make ice. Then use it during the day to melt. They do that by use of tiered pricing. http://www.foxnews.com/story/2007/07/16/new-york-skyscrapers-use-ice-to-stay-cool.html [foxnews.com]
(Score: 1) by khallow on Monday March 19 2018, @07:53AM
NYC skyscrapers aren't cranking up the AC for job growth.
(Score: 1) by fustakrakich on Monday March 19 2018, @03:42AM (10 children)
They don't care what you use your power for, only that you consume too much too fast. It's no different than paying a higher price for more bandwidth. The practice is not without precedent? I would think it'd be ubiquitous...
La politica e i criminali sono la stessa cosa..
(Score: 2, Touché) by khallow on Monday March 19 2018, @07:56AM (9 children)
Not at all. Lot of markets have low price per unit in large volume.
(Score: 1) by fustakrakich on Tuesday March 20 2018, @03:35AM (8 children)
Yeah, but this is large volume per second. For online data and electrical consumption, the rate should determine the price, not the volume itself.
La politica e i criminali sono la stessa cosa..
(Score: 1) by khallow on Tuesday March 20 2018, @05:03PM (7 children)
No, the volume is more important. It's not hard that hard to wire up more transmission line than one can possibly support with the grid or one's power sources.
(Score: 1) by fustakrakich on Tuesday March 20 2018, @06:10PM (6 children)
We do measure and bill our electricity by the kilowatt per hour. If I consume the same kilowatts per month, it will be much cheaper, and I can do it with much thinner less expensive wire. Our equipment is built to accommodate the rate of consumption. The wires are built for amperage at a given voltage.
And I do pay for internet by the bits per second. As it should be. Bandwidth is all that matters.
La politica e i criminali sono la stessa cosa..
(Score: 1) by khallow on Tuesday March 20 2018, @06:56PM (5 children)
kilowatt is already a measure of power - which is rate of change of energy usage. "Per hour" means you're only paying when you change your rate of usage, such as turning a light on. But you wouldn't pay, if you just left everything on since the rate of power consumption doesn't change.
What you're really thinking of is "kilowatt-hour" which consumption of a kilowatt over the course of an hour. That is a measure of energy (3.6 MJ, for example) not of power. A 100 watt light bulb left on for 10 hours would consume one kilowatt-hour.
(Score: 1) by fustakrakich on Wednesday March 21 2018, @12:01AM (4 children)
Kilowatt/hour is a kilowatt per hour. Use a 100 watt light bulb for ten hours and you still consumed a kilowatt of electricity. It is amount divided by time. The time factor is the only thing we need to worry about. You get all the kilowatts you want. If you want it all in one day as opposed to one month it should cost you more because more infrastructure is required to supply it at the requested rate.
La politica e i criminali sono la stessa cosa..
(Score: 1) by khallow on Wednesday March 21 2018, @12:52AM (3 children)
(Score: 1) by fustakrakich on Wednesday March 21 2018, @05:43AM (2 children)
For billing it is. It is kilowatts per hour averaged out over the billing period. And regardless, it doesn't change the argument. The infrastructure is designed to cover the rate of consumption. And that is what kilowatt-hours measure.
La politica e i criminali sono la stessa cosa..
(Score: 1) by khallow on Wednesday March 21 2018, @06:42AM (1 child)
At peak load which is much higher than average load. Keep in mind that utilities can and do provide far more power than cryptocurrency miners consume. The problem is when the miners draw that considerable power at the same time that everyone else is. This whole thing could have been nipped in the bud by charging everyone including the miners higher prices at peak load and lower prices at off times when power is cheaper to provide.
Also keep in mind that local lines are engineered to be able to provide much more power than typically is consumed. For example, a house typically consumes about 1-2 kW at a time during peak load (US houses being on the higher end and possible reliance on electricity-based heating/cooling). A single 15 amp circuit at 120 V (typical circuit load in a US house) could provide that and houses typically have a number of these circuits (as well as some capable of far higher loads, 30 and 60 amps are common).
If everyone actually did use the highest level of power that their homes and businesses could draw, it'd wreck the grid. But it's not a problem in the short term for a small number of users to do so, particularly, when the grid is operating far below its capacity (such as at 2am in the morning).
Second, it does matter how much energy is consumed in total which can deplete those cheap hydroelectric sources that these utilities apparently heavily rely on. But they should have fairly cheap base load either directly on their local grid or that they can buy from outside. So off peak times, they should be able to provide cheap power to those cryptocurrency miners. In fact, properly done, which is something that should have been done decades ago, the miners could actually smooth out demand on the grid by consuming power during off peak times and dropping out during peak load.
(Score: 1) by fustakrakich on Wednesday March 21 2018, @11:11PM
Yes, peak usage is an issue for a insufficient infrastructure, and I understand the necessity of using price to spreak the load out.
FTW (thank you!):
kilowatt hours is the power in kilowatts multiplied by the time in hours...
Gee! I couldn't have said it better myself...
La politica e i criminali sono la stessa cosa..