Texas Allocates $31.7M to Riot to Suspend Bitcoin Mining Amid Energy Crisis

Texas miners have significantly reduced their operations by 90% during the ongoing energy crisis, following the state’s provision of $31.7 million in energy credits.

Amid extreme weather conditions that have escalated the power crisis, Texas has sought assistance from Riot Platforms, a prominent Bitcoin mining company. The state’s power grid operator awarded Riot Platforms the substantial energy credits in recognition of their efforts to decrease electricity consumption during a severe heat wave. This figure surpasses the approximately $9.7 million in Bitcoin that the company mined during the same timeframe.

These energy credits, allocated by the Electric Reliability Council of Texas (ERCOT), are designed to alleviate immediate pressure on the power grid while simultaneously reducing Riot’s operational expenses. Despite incurring a loss exceeding $500 million in 2022, Riot Platforms has found potential relief in these credits. In its latest quarterly report, the company noted a loss of about $27 million against revenues of $76.7 million, highlighting the importance of the energy credits as a financial buffer.

### Legislative and Public Backlash Against Bitcoin Mining

Texas’s power infrastructure is increasingly strained, exacerbated by climate change and rising energy demands. The situation worsened last year during a snowstorm that caused widespread blackouts for both residential and commercial users. ERCOT’s recent emergency declaration urging Texans to conserve energy from 5 p.m. to 9 p.m. illustrates the ongoing challenges faced by the state.

The decision to allocate taxpayer-funded energy credits to Bitcoin miners has sparked public debate. A petition from residents in Navarro County has gathered nearly 1,200 signatures opposing a local Bitcoin mining operation, citing concerns over the “enormous burden on our already fragile infrastructure.”

State legislators are also paying attention. Earlier this year, the Texas Senate enacted legislation aimed at limiting incentives for cryptocurrency miners involved in ERCOT’s load-reduction programs.

The Bitcoin mining industry has become a point of contention, particularly in Texas, where the state’s energy issues have been intensified by the sector’s substantial electricity consumption. Major miners like Riot Platforms and Marathon Digital Holdings have been compelled to suspend operations during previous crises, impacting profitability and igniting discussions about their role in the state’s energy framework.