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Russian government allows regions to raise electricity prices for crypto miners

The federal government in Moscow has allowed regions to set local electricity tariffs for the population, a measure that will impact crypto mining at home. Subsidized household electricity in Russia is often used to mint digital currencies in basements and garages.

Regions in Russia Receive Approval to Increase Home Mining Costs

Russians who mine cryptocurrencies at home can expect higher electricity bills due to a reform that allows regional authorities to limit the supply of electricity at preferential prices. The move comes after local utility companies sought permission to set thresholds on the amount of subsidized electricity available to the general population while complaining about the proliferation of crypto mining in residential areas.

Private customers have to pay more for consumption that exceeds these thresholds, reported the Russian business newspaper Kommersant. Most Russian regions have yet to introduce new pricing models, with the exception of Crimea, where cheap electricity is already limited to 150 kWh per month. The Federal Cartel Office and the Ministry of Energy have given assurances that the new policy aims to curb “inappropriate energy consumption” and should not increase spending for most consumers.

Electricity tariffs for households in Russia are regulated by the state, which keeps them well below the economically justified level. The electricity suppliers compensate for the difference with higher tariffs for companies. In 2021, companies are expected to pay over 240 billion rubles (nearly $ 3.3 billion) to fund this “cross-subsidization,” according to data from the Russian Energy Market Authority.

According to an estimate by Kommersant, the average monthly consumption per household in the Russian Federation was around 250 kWh last year. Around 40% of the apartments in apartment buildings now consume more than 600 kWh per month.

The latest amendment to a federal government decree will give all other regions besides the annexed Crimea the opportunity to introduce differentiated electricity tariffs. The changes come after power distributors and authorities in Irkutsk Oblast complained about the rapidly growing number of crypto farms in residential buildings.

Electricity for households in Irkutsk, known as the crypto-mining capital of Russia, costs only 0.86 rubles ($ 0.01) per kWh, while the average tariff across Russia costs 4.25 rubles (almost $ 0.06) amounts to. At the beginning of December, media reports revealed that a local energy supplier, Irkutskenergosbyt, filed 85 lawsuits against miners at home this year.

Mining is one of several crypto-related activities that stayed outside the scope of the On Digital Financial Assets Act, which partially regulated the Russian crypto space in January. Demands were made among officials in Moscow, recognize evaluate it as a business activity and tax it accordingly. This would also allow utilities to charge miners more for the energy they need to mint digital coins. ONE Working group set up at the State Duma recently held its first meeting to discuss regulations for mining and other sectors in the crypto industry.

Do you expect the Russian regions to raise electricity prices for cryptocurrency miners? Let us know in the comments section below.

Russian government allows regions to raise electricity prices for crypto miners, Crypto Trading News

Lubomir Tassev

Lubomir Tassev is a tech-savvy journalist from Eastern Europe who likes Hitchens’ quote: “Being a writer is what I am and not what I do.” In addition to crypto, blockchain and fintech, international politics and economics are two more Sources of inspiration.

Photo credits: Shutterstock, Pixabay, Wiki Commons

Source: Crypto News Austria

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