Two state lawmakers are trying to curb pollution and energy usage caused by crypto mining facilities across the state.
The proposed bills introduced by Democratic state Senators Liz Krueger and Pete Harckham would stop crypto mines from operating on expired or lapsed air permits (S6833A) and impose taxes based on energy usage (S8518).
The Digi Power X plant in North Tonawanda - formerly known as Digihost/Fortistar - has been operating on an expired air permit since 2021 and a renewal application has been pending with the DEC for more than four years.
Deborah Gondek, Chair of the North Tonawanda Climate Smart Task Force, said greenhouse gas emissions and local air pollution have increased over 3,500% since Digi Power X began crypto mining, citing the EPA's Clean Air Markets Program data.
"In addition to increased emissions, our city residents suffer from horrible health issues resulting from constant exposure to high noise levels generated by fans cooling thousands of computers at the Digihost site," Gondek said.
Crypto mining facilities use massive amounts of energy to power computers that solve complex mathematical problems to release cryptocurrency, such as Bitcoin.
Gondek said the facility in North Tonawanda drives up energy costs for residents while not paying their fair share. She hopes the taxes based on energy usage in the proposed legislation would change that.
"Residents here have suffered for three and a half years and counting and that’s too long," Gondek said. "Right now Digi Power X pays the equivalent of three cents per kilowatt hour for its energy, while residential rate payers New York pay an average of 22.25 cents per kilowatt hour for their electricity. These are 2023 numbers. And that's not fair either."
The tax would gradually scale with consumption: the more electricity a mining operation uses in a year, the higher the tax rate on the excess usage, exempting facilities that get their energy from renewable sources that are not connected to the electric grid. Taxes collected would go to state energy affordability programs.
Sen. Krueger, who represents New York's 28th District and sponsored the excise tax bill, said stopping crypto mining altogether across the state is a "win win."
"They don't create jobs," she said. "They do create horrible environmental impacts for air and water. They are eating up our energy at mind bogglingly fast rates, and because they're getting discounted rates, we the people are actually subsidizing them. And at the end of it, we have something called cryptocurrency, which I'm still not even sure why anyone would go near."
North Tonawanda officials have already issued multiple citations to Digi Power X/Digihost for violating the local noise ordinance.
Digi Power X, is headquartered in Miami, Florida and has offices across the border in Toronto. It has more than $37 million in assets, including more than $8 million in cash and digital currencies according to the company's latest filings with the SEC.
Digi Power X has not yet returned BTPM NPR’s request for comment.
