The Moscow federal government has allowed regions to set local electricity tariffs for the population, a move that will affect crypto mining in homes. Subsidized household electricity in Russia is often used to mint digital currencies in basements and garages.
Regions in Russia Obtained Permission to Increase Costs of Home-Based Mining
Russians who mine cryptocurrencies at home can expect higher electricity bills as a result of a reform allowing regional authorities to limit electric power supplied at preferential rates. The move comes after local utilities demanded the power to set thresholds for the amount of subsidized electricity available to the general population while complaining about the spread of crypto mining in residential areas.
Private customers will have to pay more for consumption exceeding these thresholds, reported the Russian business daily Kommersant. Most Russian regions have yet to adopt new pricing systems, with the exception of Crimea where cheap electricity is already limited to 150 kWh per month. The Federal Antimonopoly Service and the Ministry of Energy have assured that the new policy aims to reduce âinappropriate energy consumptionâ and should not increase spending for most consumers.
Electricity tariffs for households in Russia are regulated by the state, which keeps them well below economically justified levels. Electric utilities make up the difference with higher tariffs for businesses. In 2021, companies are expected to pay more than 240 billion rubles (nearly $ 3.3 billion) to fund this “cross-subsidy”, according to data from the Russian regulator of energy markets.
According to an estimate cited by the Kommersant, the average monthly consumption per household in the Russian Federation was around 250 kWh last year. About 40% of condominiums now consume more than 600 kWh per month.
Recent changes to a federal government decree will offer all other regions, besides annexed Crimea, the possibility of introducing differentiated electricity tariffs. The changes come after electricity distributors and authorities in Irkutsk Oblast complained about the growing number of crypto farms in residential buildings.
Electricity for households in Irkutsk, which has been dubbed the crypto-mining capital of Russia, costs just 0.86 rubles ($ 0.01) per kWh while the average tariff across the whole of the Russia is 4.25 rubles (nearly $ 0.06). Earlier in December, media reported that a local electric utility, Irkutskenergosbyt, had filed 85 lawsuits this year against minors in their homes.
Mining is one of many crypto-related activities that have remained outside the scope of the âDigital Financial Assetsâ law, which partially regulated the Russian crypto space in January. There have been growing calls among officials in Moscow to recognize it as a business activity and tax it accordingly. It would also allow utilities to charge miners more for the energy they need to mint digital coins. A task force set up in the State Duma recently held its first meeting to discuss regulations relating to mining and other sectors of the crypto industry.
Do you expect Russian regions to increase electricity tariffs for cryptocurrency miners? Tell us in the comments section below.
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