• Skip to primary navigation
  • Skip to main content
  • Skip to footer
  • Se Habla Español
  • Contact
  • Facebook
  • Instagram
  • TikTok
cropped mountain association logo with copyright.png

Mountain Association

Building a New Economy, Together.

    • Access expertise to grow your business or organization.

      Apply for Support

    • Start Here
      • Learn About Support
      • Apply to Work with a Consultant
      • Success Stories
    • Resources
      • Tools & Templates
      • SPARK Nonprofit Collaborative
      • Client Login
    • Expand your impact with our flexible loans.

      Talk to Us About a Loan

    • Start Here
      • Learn About Loans
      • Start the Application Process
      • Success Stories
    • Resources
      • FAQs
      • Disaster Recovery Loans
      • CrowdMatch Loans
    • We can help you save money.

      Apply for an Energy Assessment

    • Start Here
      • Learn About Our Energy Program
      • Apply for a Free Energy Savings Assessment
      • Success Stories
    • Resources
      • FAQs
      • Solar Support
      • Energy Savings Microloan
    • Start something in your community.

      How We Can Help

    • Start Here
      • How We Support Communities
      • Success Stories
    • Hazard, KY
      • 479 Main Street Project
      • Long-Term Work
    • We can help tell your story.

      Read Our Stories

    • Blog
      • Read Stories
      • Newsletter | Social Media
    • Communications
      • Press & Media
      • EKY Influencer & Media Network
    • Building a new economy, together.

      (859) 986-2373

      info@mtassociation.org

      Sign Me Up for News

    • About Us
      • What We Do
      • A New Economy
        • How It’s Working
    • Our People
      • Team
      • Board of Directors
      • Careers
    • Impact
      • Our History
      • By the Numbers
      • Publications
  • (859) 986-2373

    info@mtassociation.org

     

    Building a new economy, together.
You are here: Home / Energy / Will Cryptomining Companies Coming to Kentucky Raise Your Electric Bills? 

Energy

Will Cryptomining Companies Coming to Kentucky Raise Your Electric Bills? 

April 3, 2023

Share:

This is an op-ed dated April 3, 2023 that ran in several papers.

A Chinese cryptomining company is proposing to build a $250 million plant near the town of Louisa in Eastern Kentucky. At the same time, another cryptomining firm is proposing a plant near Waverly, Kentucky. Kentucky Power and Kentucky Utilities (KU) propose to give them special rates on their electric bills – deals that the Kentucky Public Service Commission (PSC) is currently investigating for potential negative impacts on other Kentucky Power and KU customers.

What is cryptomining? Cryptomining creates digital currency, such as Bitcoin, through an energy intensive process of competitions between computers to solve complex mathematical equations. Cryptomining facilities include banks of computers, and seek cheap energy. Depending on the size of the operation, utility bills could be millions of dollars each month, as is the case with the proposed project in Lawrence County, which would likely have bills of about $4 million each month.

Utilities are allowed by law to offer special electric rates as an incentive to get businesses to locate in the utility’s service area, on the theory that the companies will create jobs and other economic benefits that overall benefit utility customers, as well as local and state residents. In theory, a large industrial customer can help lower rates for other customers since their large electric bills can help offset a significant share of the utility’s overall operating costs. That’s important in Eastern Kentucky where overall economic decline since the collapse of the coal industry has contributed to a nearly 200 percent increase in the rates and fees paid by Kentucky Power and KU customers.

Yet there are still many questions to ask with each special rate proposed in order to assure that the benefits will materialize and that the costs of serving these industrial customers won’t actually end up being borne on the backs of other ratepayers.

Mountain Association, the nonprofit I work for, closely watches Eastern Kentucky’s utility companies to advocate for affordable and clean energy on behalf of ratepayers. Along with our partners, we are currently involved as either intervenors, movants or commenters in four cryptocurrency mining cases that are being considered by PSC in Frankfort. The largest proposal, by Kentucky Power, is to offer a 10-year special rate for Ebon, a cryptomine that it claims – without evidence so far – will create 50 to 100 jobs.

The proposal is to provide Ebon 250,000 kilowatts of power, or the peak capacity needed for about 25,000 homes, to fuel the future Ebon mining facility on property adjacent to the Big Sandy Plant in Lawrence County. Kentucky Power would need to build additional infrastructure over time to support the mine. The PSC will make a decision after hearing from all interested parties and has put the contract on hold until at least late April to conduct its investigation.

We are intervening in the case, which means we will have several opportunities to scrutinize the process with testimony, discovery and cross-examination. Attorneys for another intervenor, Kentucky Industrial Utility Customers, found that each ratepayer could pay approximately $36 a year to subsidize Ebon’s operation. But what has not yet been calculated is the impact if Ebon’s plans don’t pan out.

Cryptocurrencies are very volatile and speculative. In the past five years, the stock for Ebang International Holdings Inc., of which Ebon is a subsidiary, has fallen 95.3 percent. The value of Bitcoin, for which Ebon will mine, has dropped 41 percent over the past year. Other Kentucky communities have already experienced this. In Western Kentucky, a company pulled out of a deal less than a year after acquiring a 120,000 square-foot facility in Paducah. If Ebon goes out of business – or if they pull up stakes and relocate for a better deal elsewhere – ratepayers could be left to foot the bill for the investments Kentucky Power made to bring Ebon here. 

Ebon is leasing the land for the project from Kentucky Power, but ratepayers will still be on the hook for any increased property taxes on the land. Kentucky Power is offering these discounted rates to Ebon at a time when it already needs to find new sources to supply electricity to its customers, and its customers could be on the hook for the costs of adding more capacity to serve Ebon if Ebon doesn’t use it.

We are seeing many cases pop up In Kentucky in part due to legal changes passed in 2022 by Kentucky legislators to attract these companies despite their volatile nature. Our coalition of partners will try to intervene on behalf of ratepayers in future cases that are undoubtedly coming. We will continue to comb through the details of each proposal and ask what needs to be asked: are the jobs proposed realistic, good, long-term jobs? Does the infrastructure proposed take into account the expense of continuing to operate inefficient fossil fuel plants to power them or buying more power from somewhere else? Is it worth the risk to ratepayers to bet on the long-term viability of such a risky industry? Will there be enough protections so that ratepayers won’t get stuck with a failed company’s unpaid power bills and infrastructure costs?

With the impacts of climate change at our doors and on our bills each month, we will keep an eye on this new industry coming to our state. We want to help keep energy affordable and reliable for all Kentuckians as we push toward a more just, clean energy future. 

Josh Bills is the Commercial Energy Specialist at the Mountain Association. He can be reached at josh@mtassociation.org.

Recent Posts

solar kentucky grocery frenchburg kentucky market

Energy Lending

Seeing the Light: Inspired by Peers, Kentucky Grocer Makes the Solar Switch 

Jed Weinberg knows both Eastern Kentucky and the energy world, through and through.  He grew up in Knott County, and now owns or manages four ... Read This Post

DavidCraftsConstruction

Business Support Energy

Faith in Action: 57 Years of Service at St. Vincent Mission 

From what was once a coal camp’s swimming pool in Floyd County, Kentucky, Saint Vincent Mission has served Appalachians since 1968. The nonprofit got ... Read This Post

power outage kentucky battery backup storage

Energy

Be Prepared: How to Choose Small-Scale Emergency Backup Power 

When the power goes out—whether from a storm, grid failure, or another emergency—having a small-scale backup energy solution can keep your essential ... Read This Post

Footer

cropped mountain association logo with copyright.png

Established in 1976. Prior to 2020, we were known as the Mountain Association for Community Economic Development (MACED).

Donate Now 1

Get the Newsletter

Sign Up Now

  • Programs
    • Business Support
    • Lending
    • Energy
    • Communities
    • Stories
  • About
    • What We Do
    • A New Economy
    • Team
    • Our History
    • By the Numbers
  • More
    • Donate
    • Careers
    • Board of Directors
    • Publications
    • Sponsorships

BEREA
(859) 986-2373
433 Chestnut Street
Berea, KY 40403

Meetings by appointment only

info@mtassociation.org

We are happy to make any accommodation
to better serve you. We have an on-staff
Spanish interpreter, and provide
additional free language/
interpretation services as needed.

If hearing or speech impaired,
please dial 7-1-1 for relay
services prior to calling.

HAZARD
(606) 439-0170
420 Main St
Hazard, KY 41701

PRESTONSBURG
(606) 264-5910
268 E Friend St, Ste 101
Prestonsburg, KY 41653

Copyright © 2025 Mountain Association | Privacy Policy | Terms & Conditions | Non-profit Disclosures

made by P&P
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.Ok