China-based company Ebon International will not be getting discounted energy prices for its proposed cryptomining facility in Eastern Kentucky, the state’s regulators announced.
The Public Service Commission is also expected to issue a decision this month on rate discounts for another cryptomining facility in Hatfield.
Thom Cmar, senior attorney for the environmental law firm Earthjustice, explained the special contract Ebon and Kentucky Power lobbied for would have given the company millions of dollars in subsidies. The problem, he said, is cryptomining is energy intensive, strains electric grids and would have likely resulted in rate increases passed on to residents.
“The Kentucky Public Service Commission just thought this was too risky of a contract, at a time when Kentucky Power itself has had trouble serving its existing customers,” Cmar noted.
Under state law, utilities are allowed to offer special rates as an incentive for businesses. Supporters argued energy discounts help attract companies to bring jobs and other economic benefits to the utility’s service area.
But Cmar countered cryptomining is a boom-and-bust industry, with no track record of providing good-paying jobs for the long haul.
“These facilities are potentially ‘here today, gone tomorrow,’ as it’s entirely dependent on the price of these international cryptocurrency markets for Bitcoin and other cryptocurrencies,” Cmar stressed.
Cmar added advocacy groups have been urging Kentucky utilities to double down on the availability of federal funding to support renewable energy development throughout the state.
“We’re talking at a time when Kentucky Power has proposed a massive new rate increase on its residential customers,” Cmar pointed out. “The reason for that is because they’ve had trouble planning around a transition away from coal.”
The Infrastructure Investment and Jobs Act and the Inflation Reduction Act included billions of dollars in tax credits, loans, grants and other financial assistance to state utilities for clean-energy initiatives.
