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In Washington State, a New Rate Is Approved for Cryptocurrency Server Farms

July 27, 2016 By Cheryl Kaften

On July 18, Chelan County Public Utility District (PUD) in Washington State approved a higher electric rate for customers with high-density loads (HDLs) – including a growing number of “cryptocurrency server farms” in the area that support trade in the virtual person-to-person monetary exchange, bitcoin,

The new rate classification is called Schedule 35, according to a report in the trade publication Government Technology. It applies to customers whose operations consume 250 kilowatt-hours (kWh) of power per square foot of operational floor space per year, but require less than 5 average megawatts (MW) of power at any specific time.

HDL customers must pay upfront for all of the capital costs the PUD incurs for the higher-capacity equipment needed to deliver power to the customer’s location. Included is a fee of $190 per kilowatt of new or increased HDL load. to offset the impacts from HDL customers on the PUD’s electric system capacity.

The rate will become effective next January 1, and includes a transition period of up to five years for existing high- density load customers who can show they’ve made substantial investment and meet other criteria.

Board members and PUD staffers have worked on the issue since late 2014, following a spike in the number and size of electric service inquires with the potential for doubling existing load.  Commissioners put in place a moratorium on new loads of 1 average MW or more on December 15, 2014, later modifying it to cover just high-density loads.

Board members approved the rate as it was presented at a public hearing in June. The current moratorium on accepting applications for service from energy intense loads will be reviewed by PUD commissioners on October 3.

The new rate recognizes that high density loads impose costs different in type and magnitude than other commercial and industrial customers. In light of the rate case and the temporary moratorium on large new loads, new cryptocurrency server farms have located on the other side of the Columbia River in the service territories of the Douglas and Grant County utility districts, according to the Government Technology report.

Board President Randy Smith has not taken part in discussions on the new rate and did not vote on July 18 to avoid the appearance of a conflict due to a business interest in facilities being used by a data company.

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