A new Texas law is anticipated to reduce the state’s appeal to Bitcoin miners.
Republicans Lois Kolkhorst, Donna Campbell, and Robert Nichols want to end tax advantages for miners that use more than 10 megawatts (MW), and they want them to sign up as flexible load operators with the state grid operator ERCOT.
On Wednesday, April 4, the Senate passed Senate Bill 1751 with a vote of 10-0.
The state was previously a key global hub for Bitcoin mining, especially when mining operations were moved by China’s prohibition, thanks to its deregulated system, affordable electricity, and renewable energy choices.
However, according to Lee Bratcher, president of the Texas Blockchain Council, the state’s bitcoin miners are using about 2,100 MW, or 75% more power than they did in 2017. This is equivalent to roughly 3.7% of the lowest expected peak demand and over three times the amount of energy used in 2021.
A reliable supply of energy has become a critical concern for local citizens as a result of the Texas grid experiencing disastrous disruptions during catastrophic weather events in recent years.
At the moment, miners are urged to stop down during times of high demand so that power can be diverted to the grid.
A key clause in the new bill restricts the involvement of miners in this demand response program to just 10% of the whole program.
Riot Blockchain, based in Texas (NASDAQ:RIOT), is one of the businesses that benefited from the state’s incentives last year, collecting up to $9.5 million in power credits by repeatedly turning down its rigs.
Dennis Porter, the CEO of Satoshi Action Fund, tweeted his fear that the measure would take away incentives for miners to develop jobs in rural areas.
Porter cautioned that the bill might be approved by the Senate and said that the committee members were convinced by the bill’s influential sponsor.
He emphasized how crucial it was to oppose the bill in the House in order to stop it from being passed.
Before being sent to the House, the bill will now head to the Texas Senate for a floor vote.
