According to Cointelegraph, New York State Senator Liz Krueger has introduced a bill aimed at imposing excise taxes on the energy consumption of cryptocurrency mining companies operating within the state. This legislative proposal outlines a tiered tax structure, exempting miners who consume 2.25 million kilowatt-hours (kWh) or less annually. For those consuming between 2.26 million and 5 million kWh, a tax of 2 cents per kWh will be applied. Miners using between 5 million and 10 million kWh will face a tax of 3 cents per kWh, while those consuming up to 20 million kWh will be charged 4 cents per kWh. Any miner exceeding 20 million kWh annually will incur a tax of 5 cents per kWh.
The bill provides an exemption for miners utilizing 100% renewable energy sources. This exemption aligns with the previous two-year mining ban moratorium, which allowed clean energy miners to operate in New York. The moratorium, signed by Governor Kathy Hochul in 2022, expired in 2024. The crypto mining industry, known for its competitive nature and narrow profit margins, could face significant challenges due to this proposed energy tax. The additional costs may drive miners reliant on grid electricity to relocate to regions without such financial burdens.
Electricity costs are a critical factor in the mining industry, often determining the viability of operations. Companies with the capability to secure land and develop infrastructure for renewable energy in remote areas can mitigate these costs, gaining a competitive edge over smaller miners and those dependent on grid energy at retail prices. The median cost of mining a single Bitcoin (BTC) has surged, reaching over $70,000 in the second quarter of 2025, amid increasing mining difficulty and network hashrate. Energy prices in the first quarter of 2025 rose to approximately $0.08 per kWh, significantly impacting mining companies like TeraWulf. The company, which operates a facility in upstate New York, reported a loss of $61.4 million during this period due to the doubling of energy costs relative to revenue.
