“Cryptocurrency mining operations are price-sensitive entities that can be quickly scaled back or shut down if mining becomes uneconomical,” the agency said.
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Global credit rating agency Fitch Rankings is warning public electricity utilities across the United States to minimize the risk that cryptocurrency mining operations could post their electricity production.
In an announcement Monday, Fitch Ratings said that only utilities in states like Washington, which have excess generating capacity, can meet the energy requirements of many cryptocurrency mining operations. death. The agency stated that while some cryptocurrency miners may become “the largest customers in the rural service territory,” the operations often provide “very little additional economic benefit.” “from employment or boosting the local economy.
“The volatile and unregulated nature of cryptocurrency mining and the high volume of load requests led some Washington utilities to adopt new methods starting in 2014 to minimize exposure. with crypto mining entities, including crypto load limit, develop rate structure to capture Fitch Ratings indicates exit risk of a high risk industry and customer concentration limits is determined.
In Texas, where many miners have set up shop after companies migrated to China, Fitch Scores recommends utility companies invest in new facilities, sign long-term power purchase agreements term or gain power through real-time market buying to process tonnage additions. However, each option carries financial risks that can ultimately be passed on to residents:
“Cryptocurrency mining operations are price-sensitive entities that can be quickly scaled down or shut down if mining becomes uneconomical.”
Many crypto miners are looking for the most cost-effective region to mine tokens, with some US states, including Texas and Washington, offering more favorable conditions than other states. is different. Canadian mining company Bitfarms announced in November that it was planning to build a data center in Washington State, citing “cost-effective electricity” and production rates. Whinstone, later acquired by Riot Blockchain, set up shop in Texas, taking advantage of the state’s wind turbines and deregulated grid.
Related: Texas Bitcoin Mining Energy Demand Could Grow 5X By 2023
Fitch Ratings has previously issued warnings regarding the use of cryptocurrencies like Bitcoin (BTC) in local economies. In August, just before El Salvador implemented the Bitcoin Law to legal tender for crypto assets, the agency warned of volatility and operational risks to citizens using crypto. , adding that local insurers may be hesitant to adopt BTC for claim payments or benefits.