FERC rejects Basin Electric’s bid for special cryptocurrency mine and large load rates
Energize Weekly, August 28, 2024
The Basin Electric Power Cooperative’s plan for special rates for cryptocurrency mines and other large loads was rejected by the Federal Energy Regulatory Commission (FERC), which said the co-op had not proved they were needed.
“We find that Basin has not met its burden to demonstrate that the proposed revisions to Rate Schedule A to add Crypto and Large Load Rate Schedules are just and reasonable and not unduly discriminatory or preferential,” the commission said in its Aug. 20 ruling.
Bismarck, North Dakota-based Basin Electric provides wholesale power to 140 electric cooperatives across nine states from the Midwest through the plains to the Southwest.
The crypto rate was necessary, Basin Electric argued, due to the large and “highly speculative” nature of crypto operations, according to the FERC ruling.
In 2023, Basin Electric said its crypto mining load was 200 megawatts, but expected that load to grow to 1,000 megawatts over the next few years.
Basin Electric and its member cooperatives will have to make the investments to meet that increasing demand. The federal ENERGY STAR program estimates a single cryptocurrency transaction takes as much electricity as six families use in a day.
The problem, the power wholesaler said, is that since cryptocurrency operations do not require significant investments in infrastructure or a workforce, they can be established nearly anywhere and relocate in response to economic signals and market conditions.
“Basin explains that this could result in an untenable situation in which it must construct new generation to serve crypto loads that will ultimately relocate in the near future, causing the newly constructed generation to become obsolete and result in stranded assets,” the FERC ruling said.
But the commission said the cooperative “has not provided adequate evidence to support its assertion that all crypto loads pose a greater stranded asset risk than other loads of similar size.”
Similarly, Basin Electric said it would be pressed to quickly supply power for new large loads spurred by federal and state incentives, such as large industrial plants, direct-air carbon capture facilities, hydrogen hubs, and green ammonia factories.
“Basin … states that the dependency of these projects on federal funding means that the projects may never be realized and that Basin will be left to shoulder the costs of its newly acquired generation and transmission resources,” the ruling said.
Member cooperatives are in discussions with 22 large-load projects totaling nearly 5,000 megawatts of new load, Basin Electric said. But again, the FERC was unpersuaded by the power wholesaler.
“We acknowledge that there are increasing utility and stakeholder concerns related to the growing number of large loads seeking electric service,” the commission said. “While we reject Basin’s proposed revisions because Basin has failed to support them adequately, we are sympathetic to Basin’s concerns regarding its ability to serve expected load growth reliably and economically.”
