Utility customers get a good rate for electricity just by living in Arkansas, but how do you get a bulk rate that’s far lower still? One way is to start a business that burns through kilowatts, like a steel mill or a crypto mining operation.
Entergy Arkansas, which is putting the state’s largest solar array next to U.S. Steel’s plant under construction in Osceola, now proposes a bulk rate for cryptocurrency operations cropping up in Arkansas.
The state’s residential rates rank among the lowest in the 50 states. In 2020, the last year for which federal numbers were available, Arkansas’ rate of 8.32 cents per kilowatt-hour was sixth-lowest, trailing only Idaho, Louisiana, Oklahoma, Utah and Wyoming.
The proposed rate for crypto businesses is about one-eighth that, as long as the customers commit to 150 megawatts, enough juice to run thousands of computers solving mathematical puzzles to aggregate cryptocurrency. That rate works out to about a penny per kilowatt-hour.
Those inexpensive electrons gave crypto prospectors a shiver when they investigated potential sites, and three companies have announced multimillion-dollar projects in Newport: United BitEngine, Juice Tech and GMI Computing. United BitEngine started a hub in Morrilton in June, and Juice Tech is putting up centers in Walnut Ridge and Little Rock.
“The key factors for our business were a cheap and stable electricity supply, relatively cheap land near a substation and enough space to develop a site to host our containers,” said Scott Yu, CEO and president of United BitEngine, which is chartered in Delaware.
Entergy Arkansas, the state’s largest power company with more than 720,000 customers, will supply power to all the projects above, and officials hope to offer a rate similar to that paid by big customers like the steel mills, 1.035 cents per kilowatt-hour in June through September and 0.73 cents in autumn, winter and spring.
The rate proposal is detailed in Docket 22-032-TF, a case under review by the Arkansas Public Service Commission.
Entergy Arkansas proposed the rate, known as a tariff, after “surging customer interest from large-scale crypto miners seeking to establish service in our areas largely because of Entergy Arkansas’ comparatively low rates,” said Brandi Hinkle, a utility representative. “Because these operations typically involve large electrical loads, significant system resource and grid investments may be required, and traditional tariffs were not established with these kinds of customers’ needs in mind.”
The cost would include a monthly service charge of $315, a “large general services” charge of $90 a month and an incremental charge of $224 to cover administrative costs of overseeing a new interruptible power rate.
The rate is meant to “accommodate these new customers’ needs while providing the necessary financial safeguards such as increased deposits and upfront payment of all facility upgrades for the crypto miners,” Hinkle said. “Those safeguards are intended to protect all customers.”
One force behind the tariff is Cryptic Farms, which is putting bitcoin hubs in Greenbrier, Russellville, Mountain Pine and Malvern. “We got in here last year, and thought that Arkansas was a pretty great place to set up,” said Cameron Baker, an Air Force veteran who founded and owns the company. He is also helping establish an industry group, the Arkansas Blockchain Council.
“We had a chance to engage with Entergy on a rate that all the other crypto miners that are coming into Arkansas can enjoy,” Baker said. “We’ve spent a great deal of time with this, working with the utility and the commission, and shopping it around to make sure the terms are acceptable to elected leaders and industry leaders, something that we can all live with in the long term.”
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