Kentucky Opens Investigations Into Crypto Mining Energy Contracts

Following concerns raised by Kentucky Attorney General Daniel Cameron and advocates such as the Kentucky Resources Council, the Kentucky Public Service Commission (PSC) has begun a formal investigation into two contract proposals that may order discounted energy to new crypto mining operations.

The concern of the Attorney General was about how discounted rates of electricity for miners may raise the electricity bill for state residents.

The two contracts that the government department has in mind include one from Kentucky Power and Ebon International LLC and another cryptocurrency mining facility at BitKi-KY. The Kentucky Power and Ebon International LLC facility run a 250-megawatt mining facility in Louisa. BitKi-KY runs a 13- megawatt facility in Waverly. 

Markedly, the Bitki-KY facility has a $250,000 tax credit from the State of Kentucky after the bill for a Kentucky tax break for local miners was passed and signed into law. 

Earthjustice, a non-profit environmental-based organization attested to the fact that crypto mining is “extremely and exponentially energy-intensive by design.” The organization believes that discounted rates for these facilities could result in “higher electric bills for everyday Kentuckians.”

This seems similar to the thoughts of the Norwegian Finance Minister, Trygve Slagsvold Vedum, who requested the government to stop its cryptocurrency scheme that gives local bitcoin miners a discount on electricity costs.

Crypto Mining Industry Remains Unregulated

Thomas Cmar, a Cincinnati-based Senior Attorney in the Clean Energy Program at Earthjustice said;

“I’m hopeful that the Commission will see these cryptocurrency mining companies’ empty promises that they will benefit local communities for what they are, and give more scrutiny to contracts like these in the future. We’re looking forward to the upcoming hearings and discovery process so Kentuckians can know exactly what they would be paying for by subsidizing these facilities.”

The Senior Attorney also concurred with Earthjustice’s stance on how highly energy-intensive the cryptocurrency mining industry is as well as how unregulated its activities remain. In Cmar’s opinion, this is going to cost the regular Kentucky resident a lot. 

Similarly, the Executive Director of the Kentucky Conservation Committee Lane Boldman pointed out that;

“Our economic development funds should be used for projects that truly benefit local communities – not risky out-of-state companies that choose to leverage our resources, but run the risk of raising the utility bills in communities that are already challenged.”

It was also announced that such mining facilities most times do not offer any significant jobs. For now, the Ebon facility has the intention to hire about 50-100 employees while BitKi-KY is looking at only hiring five staff.

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