Apparently, The Kentucky Public Service Commission (PSC) has opened a formal investigation into two contract proposals that would offer discounted electricity prices to new cryptocurrency mining operations.
According to a December 5 statement from the environmental law group Earthjustice, The government department would be looking to determine whether the subsidy for cryptocurrency mining operations will increase electricity costs for Kentucky residents.
The two mining contracts under investigation include one between Kentucky Power and Ebon International LLC, which operates a 250-megawatt mining facility in Louisa, as well as mining company Bitki-KY.which operates a 13-megawatt facility in Waverly, Kentucky.
The contract calls for offering discounted electric rates to the Ebon facility, while Bitki-KY has already received a $250,000 tax credit from the state of Kentucky. following the passage of a tax break bill for local cryptocurrency miners.
Earthjustice argued in its statement that cryptocurrency mining is “extremely and exponentially energy intensive by design” and that discounted rates for facilities “could result in higher electricity bills for Kentuckians.”
A senior lawyer from the environmental group, Thomas Cmar, said he was looking forward “to the upcoming hearings and discovery process so that Kentuckians can know exactly what they would be paying to subsidize these facilities.” adding:
“I am hopeful that the Commission sees the empty promises of these cryptocurrency mining companies that they will benefit local communities. […] and pay more attention to contracts like these in the future.”
“Cryptocurrency mining is a largely unregulated and highly energy-intensive industry, one that could cost everyday Kentuckians dearly,” he added.
The group also claimed that cryptocurrency mining companies rarely create employment opportunities. due to the highly automated nature of mining operations.
Lane Boldmanexecutive director of the environmental advocacy group Kentucky Conservation Committee, He added that the burden of costs associated with building new crypto mining facilities “often falls on ordinary people” as “everyone else’s electricity bills go up to cover the costs.”
Kentucky has become a hotspot for cryptocurrency mining companies, which are reported to now contribute 20% of the country’s computing power for proof-of-work mining activities, which ranks second among all US states after New Yorkaccording to an October 9 CNBC report.
But while many environmental groups want bitcoin (BTC) and other proof-of-work blockchains to transition to proof-of-stake due to energy concerns, The Bitcoin Mining Council recently published a report suggesting that itcoin could soon become a “zero emissions network” by “burning stranded methane gas to mine BTC that would otherwise have been emitted into the atmosphere.”
Cointelegraph contacted the PSC for confirmation and details of the investigation, but has not received an immediate response.
Earthjustice noted that it had collaborated with the Kentucky Resources Council to submit comments on behalf of a broad coalition of Kentucky environmental groups and asked the PSC to investigate the matter.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.