According to a letter drafted by seven US lawmakers, ERCOT was “closely connected” to the growth of cryptocurrency mining in Texas.
Massachusetts Senator Elizabeth Warren and a group of six other US lawmakers have requested information from the head of the Electric Reliability Council of Texas, or ERCOT, about energy use and the potential environmental impact of cryptocurrency miners.
In a letter dated October 12, senators Elizabeth Warren, Sheldon Whitehouse, and Edward Markey and members of the House of Representatives Al Green, Katie Porter, Jared Huffman and Rashida Tlaib asked ERCOT CEO Pablo Vegas to provide details on the impact Texas cryptocurrency mining companies have had on the stability of the state’s energy grid, climate change and subsidies granted to companies. According to the letter, US lawmakers charged that cryptocurrency miners were “flooding” into Texas due to the state’s lax regulations.
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“Texas has ‘become one of the go-to places for cryptocurrency entrepreneurs,’ with active government lobbying by the Texas Blockchain Council, and CEOs and state politicians alike vowing to make the state the ‘ Bitcoin capital of the world’, ‘the Citadel for Bitcoin’, and ‘the center of the universe for Bitcoin and cryptocurrencies,'” the letter said, citing various news stories, including from Cointelegraph. “ERCOT is closely related to this growth in cryptocurrency mining.”
US lawmakers cited reports suggesting that cryptocurrency miners used “substantial amounts of electricity” resulting in “substantial amounts of carbon emissions” and other effects on air quality, plus that ERCOT could prioritize the energy needs of companies in the future, resulting in higher prices for retail consumers. They also referred to the “extreme weather events exacerbated by climate change” in Texas that had previously increased demand on the network, including the 2022 heat wave and the 2021 state blizzard.
“By some estimates, Texas is now home to a quarter of all US Bitcoin mining, and 9% of the world’s cryptocurrency mining computing power, a share that is expected to reach 20% by end of next year.”
Warren and members of the House and Senate also took aim at subsidies given to cryptocurrency miners operating in the state that were cut during spikes in demand. The letter claimed that companies like Riot Blockchain “make money from mining that puts high stresses on the local power grid” and collect “significant” grant payments.
“These payments contribute to a larger problem: that it is consumers, and not industries with an inordinate demand for electricity, such as cryptocurrencies, who bear the costs of maintaining the electricity grid,” the letter says.
US lawmakers asked Vegas to provide information since 2017 on the annual energy consumption of cryptocurrency mining companies operating in Texas and the corresponding carbon dioxide emissions. They also asked for details on the agreements between ERCOT and the mining companies regarding payments during periods of peak demand, and how the companies might respond to increased load on the network in the future. The letter asked for a response by October 31.
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Although many reports have targeted cryptocurrency miners in Texas amid weather events increasing demand on the state’s power grid, some have suggested that companies moving in could result in cheaper power by helping to stimulate infrastructure. . The Texas Comptroller’s office published a report in August suggesting that the relationship between mining companies and the energy industry was rather symbiotic, with subsidies benefiting both parties..
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