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Utility Targets Bitcoin Miners With Power Rate Hike (datacenterfrontier.com)
1sockchuck writes: A public utility in Washington state wants to raise rates for high-density power users, citing a flood of requests for electricity to power bitcoin mining operations. Chelan County has some of the cheapest power in the nation, supported by hydroelectric generation from dams along the Columbia River. That got the attention of bitcoin miners, prompting requests to provision 220 megawatts of additional power. After a one-year moratorium, the Chelan utility now wants to raise rates for high density users (more than 250kW per square foot) from 3 cents to 5 cents per kilowatt hour. Bitcoin businesses say the rate hike is discriminatory. But Chelan officials cite the transient nature of the bitcoin business as a risk to recovering their costs for provisioning new power capacity.
Bitcoin miners are only making money speculatively. No reason the power company shouldn't treat servicing them the same way.
Bitcoin businesses say the rate hike is discriminatory
So what? There are only a very few things (race, ethnicity, etc) that you can't legally use to discriminate. Being a bitcoin miner is not one of them.
Someone please tell me why we don't hear from the climate change crowd whenever there's another BitCoin mining story posted. If anything would seem to be a needless waste of energy, BitCoins would seem to top the list...
Any new capacity probably actually costs more than 5 cents per kWh for customers of under 5-10 yrs duration, depending on energy source.
This seems like an issue of how you want to allocate the costs of risk, not a terribly uncommon problem: Building the additional capacity will cost the utility a nontrivial amount of money, and if the demand that originally justified the buildout dries up, they won't exactly be able to return it for a refund(and, if they can't operate it profitably, its resale value is unlikely to be very exciting).
Unless one simply wishes to deny that, and pretend that this sort of capital investment is risk free, which is silly; the question is really just how the cost of the risk is paid: If you want the utility to bear the risk, giving you the ability to purchase or not purchase power from month to month as you see fit; they'll want to make up the cost of the risk by increasing the price. If you offer to take on the risk; but making a long-term commitment to purchasing a given amount of power, I'm sure they'd be happy to offer you a suitably lower rate.
This is only 'discriminatory' if, in fact, 'bitcoin businesses' are not a more volatile and hard to predict customer base than other electricity users; but the utility is just treating them as though they are. If they are in fact more unpredictable, it is only reasonable that the utility would want them to pay more: the rate you pay is basically their operating costs, plus the cost of the initial investment in building the generating capacity. If you are highly predictable, they'll be content to be paid back for that over the long term. If you might be gone in six months without a replacement, they need to be repaid faster. Not fundamentally different from paying more for credit if you are considered a lousy repayment risk.
Nobody ever said they were small (or portable) electric kidneys.
Not sure on the specific but generally power costs scale down as you use more. The worry here is the power company will make large capital investments to supply them that should be averaged out over 5-10-20 years but they are not sure they will still need it next year sticking everybody else with covering that capitol investment.
No sir I dont like it.
Yeaaahhhh....
"bitmining", that's the ticket...
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Well, if you are a bitcoin miner and don't like this, think BIG...
Skip the power company and figure out a way to produce your own power... Surely your idea is going to pay off so find investors, build your own power infrastructure and be the master of ALL your costs...
Otherwise, pay the man what he's asking, move your operation to someplace with cheaper power or forget the whole idea..
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
The issue is demand volatility: when you incur a large capital cost to build a generating unit, you need to set the price such that you cover operating expenses and recover the capital cost before the end-of-life of the unit.
If your customers are 100% predictable, there is room for squabbling about how much profit you get(and added complexity because the time value of money may change depending on conditions in other markets); but it is relatively simple to set a price that meets this goal.
If there is a nontrivial risk that a source of demand may arrive, require a new build-out, and then vanish relatively quickly; you'll lose most of your initial investment unless you set rates to recover that investment over a shorter timespan.
Consider the two (largely hypothetical, but convenient) limit cases: if you want to buy a new power plant, nobody will sell for less than the amount of money it costs to build it. If you are buying power from a plant with perfectly stable demand and an unlimited lifespan, your rate would closely approach the cost of production as the initial investment can easily be recovered.
In real life, obviously, no source of demand is 100% risk free; and utility customers are not asked to pay 100% of the price of the infrastructure up front; but different sorts of customers are more and less risky(both in that they, individually, will leave unexpectedly; and more importantly that they and everyone like them might experience a highly correlated change in demand and leave all at once without replacement).
For not terribly shocking reasons, this utility suspects that bitcoin miners are (a)risky and (b) likely to enter or exit the market in large groups, unpredictably. Depending on what the price of bitcoins does, miners can either demand as much electricity as you can deliver to them, or potentially shut down everything but the emergency lights in a matter of minutes to hours if mining becomes uneconomic.
It's not that they care what you use the electricity for, it's that they care how likely you are to be a predictable customer. It's like why getting a hotel room for a night is more expensive, per hour, than getting an equivalent apartment for a year: it's not that the sellers care what you are doing with the room; but they do care about the odds that they'll have a paying customer for it on any given day.
Most people use electricity for utility: fridge, stove, ac, lights, heater, washer, dryer, entertainment, etc. But bitcoin mining is of zero utility.
Untrue, bitcoin mining is also heating. Depending on the weather it is of great utility. Think of it as a space heater that might pay for itself. Probably not, but it might.
The increased power capacity is probably really for indoor, environmentally controlled grow-ops in the areaâ"and not bitcoin mining. I suspect this is just a cover story.
The actual document at https://www.chelanpud.org/docs... (linked from the article) says 250 kWh/ft^2/year.
So looks like unit confusion on the journalist's part for sure.
The actual report linked from the article talks about 250 kWh/ft^2/year, which about 29 W/ft^2.
You really don't understand the 4 levels of money, at all.
1. Barter of physical good
Before money was invented we used to barter for goods.
Ignore the /Oblg. "Wood for Sheep?" Settlers of Catan joke.
Problem: You can't trade a _partial_ (or "granular") quantity -- you can only trade "course" amounts.
Solution: So we invented a token system.
2.a) Tokens
So instead of trading the things themselves, we abstracted them and used tokens instead. This is extremely more flexible because now we have quantized our money to a small amount -- the penny, and we can easily assign a "multi-value" to things. You may not value Y but value Z instead. I however am willing to pay more for Y.
Problem: I want to trade for non-material things.
Solution: You can trade for services -- the next level of money.
2. b) Time, Experience, and Skill.
I may not have the time or skill to build a house, but I can trade money to someone who does. We both win.
Problem: Greed drives people to just make shit up and enslave others via usury. i.e. Since some yahoo decided we don't even need tokens to represent the things, we can just abstract money one more step and just treat it as a concept of numbers. This is due to a false belief that: "There is never enough." ...
Solution: But what _really_ is money? Money is just another convenient form of reality of
3. ... Energy
At the end of the day we all want matter which is just a different form of energy.
One day humans will spiritually grow up and stop behaving like little 2 year olds -- that day will forced upon us when we have free energy. We already an analogy of this with software and injection molding. Once you have the first "master" it costs almost zero to print X amount of them. So what is the value when you have as much "money" as a society could possible want and it is trivial to produce something??
The Fashion Industry shows us a glimpse:
Johanna Blakley: Lessons from fashion's free culture
* https://www.ted.com/talks/joha...
4. Honor
Sadly here is a word you don't see much more of. In the good 'ol days, a person's word was "literally" their bond. They had honor, acted honorably, and treated others with honor.
The _uniqueness_ of what people bring to the table is the last evolution of money. In a sense, a person's reputation, will eventually determine their worth to others. Hey, this person gets shit done! Or "Don't use that person, he is always late, does a poor job, etc."
Weirdly enough, a philosopher wrote about this when she explained the "logical transition from the principles guiding an individual's actions to the principles guiding his relationship with others." which is even more strangely in this Object-Oriented Programming and Objectivist Epistemology: Parallels and Implications" paper:
As a species we're still at stage 2 of understand money.
Illusion? No, you're the one delusional on what money _really_ is.
Perfect timing for my new business model. Self storage warehouses and Bitcoin mining.
Have gnu, will travel.