On Wednesday, New York State Senator Liz Krueger presented a bill aimed at implementing excise taxes on the energy consumption of crypto mining firms operating in the state.
The proposed tax will be structured in tiers, with no charges for miners utilizing 2.25 million kilowatt-hours (kWh) or less annually. Miners consuming between 2.26 million and 5 million kWh will incur a tax of 2 cents per kWh.
Those using 5 million to 10 million kWh annually will face a tax of 3 cents per kWh; miners consuming up to 20 million kWh will be taxed at 4 cents per kWh; and any miner exceeding 20 million kWh per year will be charged 5 cents per kWh.
This proposal allows for exemptions for miners utilizing 100% renewable energy; those using clean energy have been permitted to operate in New York during the two-year mining ban moratorium signed by Governor Kathy Hochul in 2022, which is set to expire in 2024.
The crypto mining sector is competitive, often with slim profit margins. Introducing an energy tax can further diminish these margins, possibly driving miners dependent on grid electricity to relocate to areas without such added costs.
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Electricity cost is a matter of life or death in the mining industry
Mining companies equipped to secure land, construct facilities, and develop the necessary infrastructure for renewable energy in remote areas can reduce or evade the fluctuating energy costs, which are crucial for mining operations.
This capability provides a competitive edge over smaller miners and larger entities that rely on power from the electrical grid charged at retail rates.
As of Q2 2025, the median cost to mine a single Bitcoin (BTC) surpassed $70,000 due to an increase in mining difficulty and network hashrate, as reported by TheMinerMag.
In the first quarter of 2025, energy prices rose to approximately $0.08 per kWh, effectively doubling costs relative to revenue for TeraWulf, a mining company situated in upstate New York, leading to a recorded loss of $61.4 million during that period.
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