The Texas bill seeks to eliminate incentives for Bitcoin miners
A new bill from the Texas Senate is looking to eliminate the incentives in place to attract cryptocurrency miners to the Lone Star state.
Texas has seen a boom in miners since the tax cuts were enacted and growth is projected to continue to increase. Mining power consumption has increased by 75% in the past 12 months despite concerns over high energy prices, according to the Texas Blockchain Council.
Senate Bill 1751
Senate Bill 1751 is sponsored by Texas State Senator Lois Kolkhorst and went through a public hearing on March 28 that included expert testimony for and against the bill.
The bill’s status is now “pending in committee.”
Under the bill, miners would no longer be allowed to participate in the state’s electric power demand response program, which currently rewards miners for feeding power back into the grid when demand is high.
The bill would also eliminate tax incentives and subsidies currently in place for crypto miners.
Supporters of the industry were opposed
However, supporters of the industry argue that removing these incentives will have a negative effect on the industry. Members of the Texas Blockchain Council testified before the Senate and argued that the subsidies had resulted in thousands of jobs through the mining industry and should not be removed.
In addition, they discussed the benefits of the mining industry and how it has helped the state with its power needs.
They also argued that limiting miners’ participation in state-run demand response programs would increase the price of these additional services for the state as miners “drive down” costs because they are extremely responsive and price sensitive.
Restrictions on participation will reduce demand and lead to fewer people offering low-cost services to the state.
The Texas Blockchain Council’s director of business development, Kristine Cranley, said the mining industry is building out the wind and solar infrastructure in Texas and also serves as buyers of last resort for that kind of energy.
In addition, Cranley said the industry is “uniquely able to meet the needs of the grid” since it can be switched on and off almost instantaneously. She added that this feature helped the state get through the last winter storm, when miners redirected their power generation to homes in need.
Incentives are no longer needed
Kolkhorst believes that the incentives and subsidies put in place to attract cryptocurrency miners to Texas are no longer necessary as large-scale growth in the sector is expected anyway.
She said during testimony that the bill is intended to “right size” the industry, which no longer needs the help provided through these incentives.
The bill is not “punitive”, according to Kolkhorst.
Disclaimer: Our authors’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Do your own due diligence before doing anything related to the content of this article. Finally, CryptoSlate takes no responsibility if you lose money trading cryptocurrencies.
