AUSTIN, Texas - — A proposed law that could restrict benefits and tax incentives for bitcoin miners in Texas is now headed to the Senate chamber for a vote. Senate Bill 1751 would also mandate that virtual currency mining shut down during times of a power emergency.
Bitcoin industry leaders are pushing back against the bill with a new "Don't Mess With Texas Innovation" campaign that launched on Monday. The campaign urges Texans to speak up against the legislation which they say is "anti-innovation." Bitcoin leaders say the bill would raise energy prices and cut jobs across the state.
After the Senate Committee on Business and Commerce sent SB 1751 to the full chamber uncontested, leaders in the bitcoin mining industry came together to stop what they call an "anti-competitive energy bill."
“Senate Bill 1751 would prohibit bitcoin miners from taking advantage of opportunities to help stabilize the grid," said Texas Blockchain Council, Lee Bratcher. "There are things called ancillary services that are grid balancing services that ERCOT procures and the Senate Bill would prohibit bitcoin miners from participating in those services, thereby, increasing the price at which ERCOT pays for procuring those grid balancing services and passing on those higher costs to consumers.”
Bratcher said the bill would restrict Bitcoin data centers' participation in ERCOT grid balancing programs.
“It’s going to increase ratepayers’ costs and it’s also sort of a targeted bill against a single industry based upon the end use of its electricity which is unprecedented, especially in Texas," he said.
Bratcher calls this bill unprecedented because he says the Lone Star state believes in free markets and competition. Some Bitcoin miners participate in demand response when there is a power emergency. When electricity is in short supply, ERCOT pays them to curtail their operations. That would stop under SB 1751.
“We think that Sen. Kolkhorst is concerned the Bitcoin miners are using too much electricity. In reality, they are incentivizing more generation and they are available to be curtailed to be turned off whenever ERCOT needs them to," Bratcher said. “We think that Sen. Kolkhorst is well-intentioned, has the best interest of her constituents at heart, but is just being fed bad information on this particular issue and is misinformed about how the bitcoin miners are benefiting the grid and benefitting Texas.”
The bill would also control electricity demand from Bitcoin mining by restricting tax incentives. Bratcher said those incentives encourage job growth. Bitcoin miners employ more than 22,000 Texans which Bratcher said could cut jobs in rural counties.
"This bill would single out bitcoin miners and prohibit them from using those tax incentives to create jobs in local counties and we feel that it is up to the county, to the local city council, and the county judges to determine what their tax incentives should be used for," he said.
CBS Austin did reach out to State Sen. Lois Kolkhorst, R-Brenham, for comment but we didn't hear back. SB 1751 could be voted on in the Senate this Wednesday.