Legislative Memos

Memorandum in Opposition - A.7389-C (Kelles) / S.6486-D (Parker)

A.7389-C (Kelles) / S.6486-D (Parker) - AN ACT to amend the environmental conservation law, in relation to establishing a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; and to require a comprehensive generic environmental impact statement review

The Independent Power Producers of New York, Inc. (IPPNY) is a trade association representing companies involved in the competitive power supply industry in New York State and in the development of electric generating facilities, the generation, sale, and marketing of electric power, and the development of natural gas transmission facilities. IPPNY Member companies produce the majority of New York's electricity, utilizing hydro, nuclear, wind, natural gas, solar, energy storage, biomass, oil, and waste-to-energy.

IPPNY opposes A.7389-C (Kelles) / S.6486-D (Parker). This bill would impose a two-year ban on the issuance and renewal of permits for fossil-fueled power plants involved with supplying “behind-the-meter” electricity to certain types of cryptocurrency mining operations, even though the NYS Department of Environmental Conservation (DEC) already enforces permit requirements. This bill is also inconsistent with the Climate Action Council’s Draft Scoping Plan in that it sends a negative investment signal in business activity based upon energy use, even though associated emissions and impacts already are required to be controlled under State law.

The Legislative Findings state that: “The continued and expanded operation of cryptocurrency mining operations running proof-of-work authentication methods to validate blockchain transactions will greatly increase the amount of energy usage in the state of New York … and impact compliance with the Climate Leadership and Community Protection Act (CLCPA).”

However, the DEC must already enforce compliance with air emissions and water usage requirements under its existing permit issuance and renewal processes and with the greenhouse gas emission reduction requirements of the CLCPA through regulations to be promulgated by 2024. The DEC has indicated that it will review the facility permit renewal to address CLCPA requirements and will consult with the United States Environmental Protection Agency and the Climate Action Council. Power plant permit holders operate in compliance with DEC’s permit requirements, and that will continue to be the case as they comply with the CLCPA.

The Climate Action Council’s Draft Scoping Plan does not ban cryptocurrency mining and instead includes provisions for the State to find ways to help energy intensive businesses to comply with the CLCPA’s targets. The State should not discourage any business activity and, instead, needs to find pathways for all types of businesses to have practical means to comply with the CLCPA.

For the reasons stated above, IPPNY opposes A.7389-C (Kelles) / S.6486-D (Parker).