An Arkansas energy provider is sweetening the deal for crypto miners in the state with a special tariff to keep costs down as the industry faces compounded challenges.
Entergy, the Fortune 500 company that specializes in distributing electric power to customers in the American South, is offering a bulk price for mining operations in a state which already has some of the lowest energy costs in the U.S.
First proposed earlier this year, the energy charge ranges from $0.75 to just over a penny per kilowatt-hour, a spokesperson for the company told Arkansas Business.
This is well below the state’s average of $0.10 per kilowatt-hour paid by commercial customers in Arkansas, which is already below the national average of $0.13.
However, each client’s bill could vary depending on additional charges, such as demand charges, as well as any extra costs the provider needs to cover, like energy efficiency.
Entergy, which is the state’s largest power company, will evaluate whether customers qualify for the special tariff based on their power usage and whether they are directly involved in crypto mining.
Recipients have to put forward a three-month deposit to secure the rate, as well as further backing in the form of a surety bond or letter of credit.
Decrypt has contacted Entergy for further comment.
Crypto miners face tough conditions
Arkansas, which enjoys some of the lowest electricity bills in the U.S., has already attracted several major mining operations thanks to both energy prices and cheap land.
Local business Cryptic Farms has opened four Bitcoin hubs in the past year across the state, while companies GMI Computing, United BitEngine, and Juice Tech have all flocked to the northeastern city of Newport.
The Arkansas boom comes at a time of tough conditions for crypto miners, as the perfect storm of low Bitcoin prices and high energy costs puts strain on many businesses.
Last month, Bitcoin miner Bitdeer delayed its $4 billion deal to go public for the third time, as investor appetite for the sector cools.
Other companies such as Compute North have been unable to see out the crypto winter and declared bankruptcy.