While Texans this year sweated out the hottest August ever recorded and paid budget-crushing electricity bills to cool their homes, at least one Bitcoin mining company made millions in extra profits when the state’s electric grid nearly ran out of juice.
In the crypto world, “mining” isn’t done in rock formations with headlamps and pick axes, but in warehouses stacked with powerful computers. These computers are used to guess a sequence of letters and numbers in order to “mine” a crypto coin worth tens of thousands of dollars. These miners typically make quintillions– billions of billions –of guesses per second, generating so much heat from the computers that the warehouses employ enormous fans or air conditioning units to keep them cool. One energy research firm, Wood Mackenzie, estimates that the energy-intensive Bitcoin mining process raises electricity costs for Texans by $1.8 billion per year.
Yet even as Wall Street has cooled on crypto, these mining companies can still make a killing, especially in Texas’ deregulated energy market. A company named Riot operates two energy-guzzling Bitcoin mining facilities in Rockdale and Corsicana. It is routinely able to bolster its profits by participating in a demand response program in which ERCOT, the state’s grid manager, asks them to commit to shutting down at times of peak demand. The New York Times reported that Riot made $9.3 million from this program in 2022, even though the state only asked companies to lower their usage for a total of 3.5 hours that year.
