Dustin Blazefer WyoFile.com
Lawmakers will consider a bill that would allow large power consumers, including cryptocurrency and blockchain miners, chip manufacturers and data centers, to contract for power outside of the regulated utility market. .
Proponents say it needs more electricity than Wyoming’s established power companies can build soon and is a way to attract new businesses that are now setting up shop in deregulated markets like Texas. Others warn that deregulation is a risky proposition and could be costly and unreliable for the remaining customers who cannot opt out of the regulated utility market. I’m here.
Lawmakers say they want to create a system that allows for deregulated power agreements while protecting average rate payers from potentially risky transactions. The Joint Minerals, Business and Economic Development Interim Commission is expected to discuss two bills, he said, of Industrial Power Zones and Direct Power Supply Service Contracts, when they meet in Casper this week.
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The Industrial Power Zone Bill authorizes exemptions for electricity consumed on deregulated state-owned land. Direct utility service contracts take a different approach. Rather than a deregulated zone, this measure will allow electricity producers to sell purpose-built generation outside of regulated utility rules to industrial customers, regardless of their location in the state.
In either case, proponents say newly deregulated customers will likely pay lower rates. This is based solely on the power and infrastructure used, not based on the cost of a large utility system (power plants, substations, transmission lines) serving thousands of customers over a large area. because it is calculated.
According to Senator Chris Rothfuss, D-Laramie, a proponent of limited deregulation, some kind of deregulation mechanism is needed no matter what steps the Minerals Commission takes. That’s because the state is constantly responding to calls from cryptocurrency and blockchain miners eager to come to Wyoming for a slew of banking laws aimed at stimulating the industry.
But what keeps them away is not Wyoming’s “fairly cheap” commercial rates, but that their business model calls for the cheapest electricity possible. There is no incentive to acquire new customers outside of a regulated monopoly system that offers a modest rate of return.
Rothfuss, who co-chairs the Task Force on Blockchain, Financial Technologies and Digital Transformation Technologies, said, “This strange system that really rules out any large-scale project that uses a lot of electricity from happening in Wyoming. “Therefore, ideally, we need an independent microgrid with a company that owns the electricity supply.”
The Wyoming Rural Electric Association, which represents 14 cooperatives in the state, opposes the bill, according to Sean Taylor, executive director of the group. Black Hills Energy and PacifiCorp, the state’s largest regulated utilities, are reluctant to the idea. In the last session, a similar measure, Senate File 71 – Deregulated Industrial Power Zones, fell through.
According to the U.S. Energy Information Administration, the average retail price of electricity in Wyoming is 8.7 cents per kilowatt hour, compared to the national average of 10.59 cents.
One of the reasons Wyoming rate payers are enjoying moderate electricity prices is that large commercial customers (for example, mines and oil and gas processing plants) are paying higher rates, and the broader utility grid because it helps keep the cost of sharing low. Some worry that if the state begins to cut large industrial customers out of its sharing system, other customers’ rates will rise.
“You can’t walk into energy deregulation,” said Shannon Anderson, attorney at the Powder River Basin Resources Council. “The way we manage the power grid is completely different.”
Creating deregulated zones, or isolated industrial microgrids, would not benefit the large utility systems that serve the state, Anderson said. Some people also consider cryptocurrency and blockchain mining to be risky. If a power company builds a new power source to service a data mining center, and its customer goes out of business, the power company and the remaining customers may end up paying for the investment.
“When a utility takes on a bad debt, one way or another, it comes back to the rate bearer,” said Anderson.
Cryptocurrency and blockchain mining, data centers and microchip manufacturing facilities all require large amounts of electricity. Globally, the cryptocurrency industry consumes more electricity than Argentina or Australia, according to a White House fact sheet. Rothfuss estimates that dozens of companies have expressed interest in coming to Wyoming, each needing between 50 and 200 megawatts of his power. With 1 megawatt he can power 400 to 900 households.
According to EIA, Wyoming has a net generating capacity of 9,599 megawatts.
Rothfuss said the state is well suited to meet new electricity needs through natural gas-powered turbines, wind energy and even existing coal-fired plants that may be retired. Wyoming also has a strong interest in selling the electricity it produces to customers in the state. Wyoming currently exports more than half of the electricity it generates.
“There is a sales tax on every kilowatt consumed in Wyoming,” Rothfuss said. “There is zero sales tax on every kilowatt consumed outside of Wyoming. So for every kilowatt sold elsewhere, we are losing money.”
Black Hills Energy recently struck a deal with Bison Blockchain, a cryptocurrency mining company, under the state’s new Blockchain Interruptible Service Fees authorized by House Bill 113 – 2019 Special Power and Utility Agreement. With this fee, Black Hills will provide megawatts of power to the Bison Blockchain, where he plans to set up shop at 45 Cheyenne suburb North Range Business Park.
According to Rothfuss, the new tariff will allow Wyoming utilities to sign contracts with cryptocurrency miners, but it won’t necessarily lead them to build new power plants in the state.
“We still hear that it is mostly inadequate, partly because utilities don’t really have electricity available,” Rothfuss said.
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