Moscow’s federal government has allowed regions to set local electricity rates for their residents. This will impact crypto mining at home. Russia’s subsidized household electricity can often be used to create digital currencies underground and in garages.
Russia grants permission to increase costs for home mining in certain regions
Russians who mine cryptocurrency at home may see higher electricity bills due to a new reform that allows regional authorities limit access to electrical energy at preferred rates. This is a result of local utilities asking for power to limit the amount of subsidised electricity that can be used by the general population. They also complained about crypto mining being spread to residential areas.
Kommersant reports that private customers will pay more if their consumption exceeds these thresholds. Most Russian regions still have not adopted new pricing models, but Crimea is the only exception. There, electricity prices are currently limited to 150kWh per month. The Federal Antimonopoly Service and the Ministry of Energy have assured that the new policy is aimed at curbing “inappropriate energy consumption” and should not increase expenses for most consumers.
Russia’s state controls electricity rates for household customers. This keeps them below the economic level. Businesses pay higher rates to compensate for this difference. In 2021, companies are expected to pay over 240 billion rubles (close to $3.3 billion) to finance this ‘cross-subsidization,’ data from Russia’s energy markets regulator has indicated.
According to an estimate quoted by the Kommersant, last year’s average monthly consumption per household in the Russian Federation was about 250 kWh. About 40% of apartments in blocks consume over 600 kWh each month.
A federal decree amendment that was recently amended will give all regions, including annexed Crimea, the possibility to implement differentiated electricity tariffs. After complaints from power distributors in Irkutsk Oblast about the fast-growing number of residential homes with crypto farms, these changes have been made.
Irkutsk is the capital of crypto mining in Russia. Electricity costs just 0.86 rubles per kWh, almost $0.06 less than the 4.25 ruble average tariff. In December media reported that Irkutskenergosbyt (a local utility) had filed 85 lawsuits against at-home miner.
Mining is one of several crypto-related activities that remained outside the scope of the law “On Digital Financial Assets,” which partially regulated the Russian crypto space in January. Moscow officials are now calling on them to tax the activity as a business. It would allow utilities to increase the charges for miners who produce digital currency. The State Duma recently established a working group to address regulations in mining and other parts of the crypto industry.
What do you think about Russian regions raising electricity rates to cryptocurrency miners. Leave a comment below.
Image creditShutterstock. Pixabay. Wiki Commons
DisclaimerThis article serves informational purposes. It does not constitute an offer, solicitation, or recommendation of any company, products or services. Bitcoin.com is not a provider of investment, tax, legal or accounting advice. The author and the company are not responsible for any loss or damage caused by the content or use of any goods, services, or information mentioned in the article.