Russian Energy Companies Criticize Proposal to Raise Electricity Rates for Crypto Miners

Russian energy companies have expressed strong opposition to the Ministry of Energy’s proposal to significantly increase electricity transmission tariffs for cryptocurrency mining centers. Concerns have been raised that this move could lead to legal challenges and an increase in unpaid energy bills, according to Kommersant.

The Ministry’s proposal, which aims to raise tariffs by five to ten times in energy-deficient regions, has faced numerous objections from the working group on energy regulation. Of the group’s members, ten voted against the proposal, two were in favor, and two abstained. The Ministry of Energy has not commented on the matter.

The initiative targets areas like southern Irkutsk Oblast, aiming to incentivize miners to relocate to regions with surplus energy. Regional commissions are to compile a registry of affected consumers. However, the proposal has been criticized for potentially driving legitimate mining operations into the gray market and failing to clearly define what constitutes mining equipment.

Critics, including the “Community of Energy Consumers” and “Rosseti,” argue that the proposal threatens the legal mining sector and could lead to an increase in debt for energy suppliers. They suggest the need for 100% prepayment and disconnection measures for mining centers running out of advance funds.

The “Association of Guaranteed Suppliers and Energy Sales Companies” estimates that the initiative could raise energy prices for mining centers eightfold. They also fear that miners may accumulate debt before relocating, exacerbating the issue of uncollectible debts.

Sergey Bezdelov, Director of the Association of Industrial Mining, called the rejection of the Ministry’s proposal expected, citing it as discriminatory and harmful to Russia’s energy and competitive legislation. Meanwhile, energy experts believe that despite the criticisms, the government may still approve the proposal if deemed necessary.

The controversy underscores the broader debate over the balance between regulating cryptocurrency mining and ensuring energy system reliability in Russia.