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- New York Senator Liz Krueger highlighted that crypto mining has increased household electricity costs by $79 million and small business costs by $165 million annually.
- Critics argue the bill unfairly targets crypto miners while excluding AI and other high-performance computing operations.
On Thursday, October 2, New York lawmakers introduced bill S.8518 as part of their plans to impose a tax on crypto mining operations. The Senate bill is centered on two primary objectives, which include combating climate change and reducing energy costs. The legislation focuses on Bitcoin and other energy-heavy crypto mining operations, addressing rising concerns about electricity usage and utility costs throughout the state.
Senator Liz Krueger has been leading this legislation with the goal of addressing crypto mining’s high electricity consumption. The bill seeks to channel these tax revenues into state energy affordability programs for low- and moderate-income households. Speaking on the development, Senator Krueger stated:
“Cryptocurrency miners provide very little benefit to New York State or to the communities where they are located, but create significant costs and burdens on ratepayers, the electric grid, the local environment, and our shared climate. This bill will ensure that the costs of those negative impacts will no longer be foisted on everyone else.”
Crypto Mining Operations Using 100% Green Energy Will Get an Exemption
Krueger highlighted that crypto mining has raised electricity costs in New York by roughly $79 million annually for households and $165 million for small businesses. According to her, this was the key reason behind pushing this legislation forward. The recent crackdown comes despite New York adopting crypto for state payments earlier this year, per the CNF report.
As a result, the draft bill brings a tiered excise tax on energy consumption for mining operations. Facilities using up to 2.25 million kWh annually would be exempt, while those consuming 2.26–5 million kWh would pay 2 cents per kWh.
Operations using 5–10 million kWh would be taxed at 3 cents, those up to 20 million kWh at 4 cents, and facilities exceeding 20 million kWh at 5 cents per kWh. The good thing about the bill is that mining operations that use renewable energy shall get a complete exemption.
Critics note that the bill targets only cryptocurrency miners, despite AI and other high-performance computing sectors consuming more energy than Bitcoin mining. The legislation could further strain miners’ already thin margins. As a result, those with grid-independent operations could further relocate to regions with lower electricity costs.
If enacted, the law could have major consequences for the industry. Just last month, a Bitcoin mining company partnered with Google on a $3.7 billion project to build data centers in New York, and increased regulatory pressure could significantly delay or derail these plans.
