CHEYENNE – Black Hills Energy officials want to offer new electricity pricing options to blockchain companies with higher consumption demands.
Cheyenne’s only electric utility provider recently filed an application with the Public Service Commission for the authority to implement a “Blockchain Interruptible Service tariff,” or different rates for different usage.
The proposed tariff is designed to serve customers with electric requirements of 10,000 kilowatts or greater – something company representatives believe the current structure cannot do while also protecting existing customers.
“We believe it will help attract blockchain entities to Wyoming, but the tariff is designed to protect our customers from added costs or service interruptions,” said Shirley Welte, BHE’s vice president of electric and gas operations for Wyoming. “Customers would not incur a rate increase as a result of this. In fact, they would receive some benefits from it; there would be some credits to existing customers.”
The proposal would grant retail customers a $2 credit to the power cost adjustment for each megawatt-hour of electricity served.
As state lawmakers double down on efforts to attract blockchain companies here, BHE wants to prepare for higher demand.
During a presentation at a Wyoming Infrastructure Authority conference Thursday, Aaron Carr, director of corporate development for BHE, and Chris Kilpatrick, director of resource planning, said customers nationwide have been forced to pay higher rates due to blockchain companies setting up shop with no municipal guidelines in place.
The New York State Public Service Commission recently ruled that municipal power authorities could charge higher rates to cryptocurrency companies to protect residential and business customers from soaring electricity requests.
Black Hills will focus heavily on cryptocurrency “miners.” Mining on the blockchain requires an enormous amount of energy because high-powered computer calculations are necessary to solve puzzles to earn the virtual currency.
“Blockchain has uses far beyond cryptocurrency mining, but for now we see that as first in the technology,” Kilpatrick said at the conference.
As part of the proposal, the utility would be responsible for all blockchain customers’ power supply costs and revenues, all third-party transmission charges attributable to blockchain customers and all overhead expenses.
“These companies are looking for low-cost energy,” Welte said. “It will require their service being interrupted at times, but we believe we have the facilities in place. If they are not there, the prospective customer would be required to make the investment in the infrastructure to serve them.”
Welte said the move is expected to further support Wyoming’s economy.
“We could see additional property taxes, sales taxes, franchise fees and employment opportunities with these companies,” she said.
A number of state influencers are also expected to propose new legislation setting a precedent for the Public Service Commission moving forward.
“The legislation is intended to support the commission as they regulate some of these large loads,” Welte said.
The application is subject to approval by the commission and, if approved, Black Hills would implement the tariff as early as Dec. 1.