Senate Bill 1751, sponsored by Texas State Senator Lois Kolkhorst, seeks to remove Texas Bitcoin mining incentives. The bill was first read on the 28th of March, 2023. Before introducing this bill for debate, Texas had robust incentives which attracted miners to the state. These incentives allowed Bitcoin miners to be rewarded for contributing to the state's energy program.
Because of the Texas Bitcoin mining incentives, it saw many miners relocating to the Lone Star State. Despite having a colossal chance of being approved by the legislators, the state is still witnessing a massive spike in Bitcoin mining. Mining of cryptocurrencies took up a whopping 75% of power consumption in the last 12 months. According to the Texas Blockchain Council, there are still expectations that this number will increase despite concerns over high energy prices.
What Does Senate Bill 1751 Stand For?
Sponsored by Texas State Senator Lois Kolkhorst, Senate Bill 1751 had its first public hearing on 28th March. During the hearing, the opinion of experts who were in support or against the bill was entertained. The bill's current status after its public hearing is "left pending in committee."
The primary stance of the bill is removing incentives received by those involved in Texas Bitcoin mining. This includes the subsidies miners enjoy from being part of the Texas energy program. Assuming this bill is approved, those who mine Bitcoin and other cryptocurrencies would no longer be allowed to participate in the state-run demand response program for electric power. Being part of the demand response program allows miners to give power back to the grid when demand is high. In return for this, miners are granted incentives and other government-powered subsidies.
Crypto Enthusiasts Against the Bill
Those who are proponents of the crypto industry are opposing Senate Bill 1751. According to them, removing miners' incentives could wreck the industry, and no one would likely benefit from such a scenario. During the first public hearing on the 28th of March, members of the Texas Blockchain Council testified in front of the Senate. In their argument, they claimed that the miners being part of the demand response program had helped create many jobs in the state. Due to the incentives, many Bitcoin Miners moved to Texas to take up full-time jobs.
Apart from the jobs, the council also noted that the state benefits from Bitcoin mining. Assuming miners begin to leave Texas if the incentives are removed, it could resort to high electricity prices in the state. This was the argument of Texas Blockchain Council’s director of Business Development, Kristine Cranley, who said that the cost of using electricity in the state could increase if miners are left out of the power demand response program. While Kristine Cranley's arguments are valid, it seems Senator Lois Kolkhorst has a different view.
Senator Lois Kolkhorst believes that adding miners to the state power demand response program is of no use. The legislator believes that Texas has to move past using crypto miners to appropriate its power sector. However, she called on the state government to look for alternatives to help them stay independent of crypto miners.