Plattsburgh Ends Cryptocurrency Moratorium | WAMC

Plattsburgh Ends Cryptocurrency Moratorium

Mar 5, 2019

After nearly a year, the City of Plattsburgh has ended a moratorium on new or expanded cryptocurrency operations in the city.

In March 2018, Plattsburgh Mayor Colin Read introduced a measure to impose a moratorium on any new commercial cryptocurrency mining operations in the city. The high-intensity use of such operations’ electricity had been pushing the city above its Purchase Power Adjustment Charge quota, hiking rates for city residents. At the time he explained the city needed time to explore options.  “We feel there’s fire, building code, health and safety aspects to this that we don’t fully understand because this onslaught of cryptocurrency servers is so new to us.  We want some time to understand it.”

The moratorium was for up to 18 months. In December Councilor Patrick McFarlin offered a resolution to rescind it, noting the city has adopted a local law establishing regulations that fulfill the purpose of establishing the moratorium.  But it had been tabled pending revisions to the city’s noise ordinances. The city council considered the question last Thursday. During public comments a resident expressed concerns about lifting the ban.  “We had excess power when they came here it was my understanding. They used all that up and you had to go on, well whatever you call it, to buy new power which was higher than what we had before. And so now all the city residents have to take part and pay that extra cost. And I’m wondering why it was decided to do it that way?”

Mayor Read responded.  “To clarify the day that the council imposed a moratorium we had also petitioned the Public Service Commission in Albany to adjust the rate structure for the city. They then passed a Rider A at our request which requires any overages of purchasing extra power at higher cost to instead be  ah being spread amongst all the ratepayers in the city that industry has to pay for all those overages all on their lonesome now.”

McFarlin said the state Public Service Commission’s rider for the city was a key consideration along with pending new noise regulations.  “We do hope that the legislation we enacted in October should maintain the safety, health and stability of the city and our residents. But we also think that Rider A should be a buttress effect against rising rates.  That doesn’t mean your rates can’t rise for other reasons.”  

A couple councilors theorized about what might happen if there was an influx of miners. But Zaffra LLC CEO Ryan Brienza doesn’t expect a rush of new operations.  “A lot of the interest has been lost over the last year especially with the price of Bitcoin and cryptocurrencies in general going down substantially in price. But there is still some opportunity. In the long run depending on where the market goes I think Plattsburgh will have some industry come in and Plattsburgh will be a great place for some data centers in the future.”

Zaffra LLC is one of the two grandfathered bitcoin mining operations that continued to operate under the moratorium.  However it could not expand operations.  Brienza is hoping to now be able to deploy new a heat recapture technology he calls Bitboxes.  “We are exhausting a tremendous amount of heat outside. It just makes sense that we can put some of these in different locations to reuse that heat. I’m from Plattsburgh and I’m looking to bring a benefit to the city. And also this would be the first I think  showcase in the country or maybe even the world of cryptocurrency mines heating buildings.”

The Plattsburgh City Council lifted the cryptocurrency moratorium on a 5 to 1 vote.