FERC Rejects Basin Electric’s Cryptocurrency Mining Rate Proposal, Citing Lack of Justification

In a potentially precedent-setting decision, the Federal Energy Regulatory Commission (FERC) has rejected a proposal from Basin Electric Power Cooperative to establish specific rate schedules for cryptocurrency mining operations. Basin Electric, a major utility cooperative based in North Dakota, had argued that cryptocurrency mining posed a higher risk of creating stranded assets compared to other large energy consumers. However, FERC ruled that Basin failed to provide sufficient evidence to justify treating cryptocurrency loads differently from other similar-sized loads, deeming the proposal as “not just and reasonable” and potentially discriminatory , according to Utilitydive.

Basin Electric’s proposal, submitted in March 2024, sought to introduce rate schedules specifically for crypto and blockchain loads, as well as a rate for new non-crypto loads exceeding 75 megawatts (MW). The cooperative, which serves about 3 million customers through 140 utility members, highlighted that it already had 200 MW of cryptocurrency load in 2023, with expectations for over 1,000 MW to come online in the future. The proposal was the first of its kind submitted to FERC, marking a significant attempt to address the growing impact of cryptocurrency mining on power infrastructure.

FERC’s rejection of the proposal, while sympathetic to Basin Electric’s concerns about serving large loads reliably, underscores the need for utilities to provide substantial evidence when proposing differentiated treatment for specific types of energy consumers. The decision may influence how other utilities approach rate structuring for cryptocurrency mining and similar high-demand operations in the future.