Regular Session 2023-2024 House Bill 1476 P.N. 1662

PRINTER'S NO. 1662

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1476

Session of

2023

INTRODUCED BY VITALI, WAXMAN, MADDEN, SANCHEZ, HILL-EVANS,

STEELE, KHAN, BRENNAN, HOWARD, PIELLI, HOHENSTEIN AND

SALISBURY, JUNE 21, 2023

REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,

JUNE 21, 2023

AN ACT

Providing for a moratorium on electric generating facility that

provides, in whole or in part, behind-the-meter electric

energy consumed or utilized by a qualifying crypto-asset

mining operation and for an impact study; and imposing duties

on the Department of Environmental Protection.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the

Cryptocurrency Energy Conservation Act.

Section 2. Declaration of policy.

The General Assembly finds and declares as follows:

(1) Climate change is the most serious long-term threat

to this planet.

(2) The world needs to reach carbon neutrality by mid-

century to avoid the worst effects of climate change.

(3) This Commonwealth is a major emitter of greenhouse

gases that contribute to climate change, the vast majority of

which are related to the production and consumption of

energy.

(4) This Commonwealth is committed to reducing

greenhouse gas emissions within the Commonwealth in order to

help combat climate change, with goals of reducing greenhouse

gas emissions by 26% from 2005 levels by 2025 and further

reducing greenhouse gas emissions by 80% from 2005 levels by

2050 under Executive Order 2019-01.

(5) Recently, cryptocurrency mining has expanded greatly

in the United States and this Commonwealth, with several

major cryptocurrency mining operations expected to come

online in this Commonwealth over the next several years.

(6) Cryptocurrency mining refers to the process of

creating new units of cryptocurrency and verifying

transactions by using computers to solve complicated

calculations.

(7) Cryptocurrency mining requires a substantial amount

of energy and currently accounts for as much as 1.7% of

energy consumption in the United States, according to a White

House report.

(8) The cryptocurrency mining industry currently

operates with little governmental oversight or regulation.

(9) The massive use of energy to produce cryptocurrency

is a wasteful use of finite resources.

(10) Unchecked cryptocurrency mining in this

Commonwealth will prevent this Commonwealth from reaching its

stated greenhouse gas emissions reduction goals.

Section 3. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

20230HB1476PN1662 - 2 -

context clearly indicates otherwise:

"Blockchain." A distributed ledger technology in which:

(1) the data are shared across a network that creates a

digital ledger of verified transactions or information among

network participants; and

(2) the data are typically linked using cryptography to

maintain the integrity of the ledger and execute other

functions, including transfer of ownership or value.

"Consensus mechanism." A process to achieve agreement among

network participants on the current state of a blockchain.

"Crypto-asset mining." The process of performing

computations to add a valid block of data to the blockchain

typically in exchange for a reward or fee, including a proof of

work consensus mechanism and excluding those computations

required to validate individual transactions.

"Department." The Department of Environmental Protection of

the Commonwealth.

"Power load." The amount of electrical power, in megawatts,

that is consumed by a qualifying crypto-asset mining operation.

"Qualifying crypto-asset mining operation." The term means:

(1) an individual crypto-asset mining operation located

in this Commonwealth that has a power load that is greater

than or equal to 5 megawatts;

(2) a crypto-asset operation located in this

Commonwealth compromised of more than one location that has a

cumulative power load that is greater than or equal to 5

megawatts; or

(3) a crypto-asset mining operation located at a natural

gas well site in this Commonwealth.

"Scope 1 emissions." Greenhouse gas emissions directly from

20230HB1476PN1662 - 3 -

sources that are operated, controlled or owned by an individual

or entity performing a qualifying crypto-asset mining operation.

"Scope 2 emissions." Indirect greenhouse gas emissions

associated with the purchase of electricity, steam, heat or

cooling by an individual or entity performing a qualifying

crypto-asset mining operation.

Section 4. Moratorium.

Notwithstanding any other provision of law, for two years

following the effective date of this section, the department may

not approve an application for a new permit or renew an existing

permit under the act of January 9, 1959 (P.L.2119, No.787),

known as the Air Pollution Control Act, including, but not

limited to, section 6.1 of the Air Pollution Control Act, for an

electric generating facility that provides, in whole or in part,

behind-the-meter electric energy consumed or utilized by a

qualifying crypto-asset mining operation.

Section 5. Reporting requirements for qualifying crypto-asset

mining operations.

(a) Reporting.--No later than six months following the

effective date of this subsection, the owner of a qualifying

crypto-asset mining operation in this Commonwealth shall submit

the following information to the department on a form prescribed

by the department:

(1) the number and geographic locations of the

qualifying crypto-asset mining operation;

(2) the number and type of devices engaged in crypto-

asset mining, purchased and retired by the qualifying crypto-

asset mining operation in the past year;

(3) the amount of electric energy consumed by the

qualifying crypto-asset mining operation, including the time

20230HB1476PN1662 - 4 -

of electricity usage;

(4) the source or sources of electric generation for all

electric energy consumed by the qualifying crypto-asset

mining operation, including the type of fuel used by the

electric generating facility;

(5) scope 1 emissions and scope 2 emissions associated

with electric generation for all electricity consumed by the

qualifying crypto-asset mining operation;

(6) water use associated with cooling crypto-asset

mining devices used by a qualifying crypto-asset mining

operation; and

(7) any other information deemed necessary by the

department.

(b) Ongoing reporting requirements.--

(1) Prior to starting operations in this Commonwealth, a

qualifying crypto-asset mining operation shall submit the

information required under subsection (a) to the department.

(2) The department shall require a qualifying crypto-

asset mining operation to submit the information under

subsection (a) on an annual basis.

all of the information required under subsections (a) and (b) to

make available on the department's publicly accessible Internet

website.

Section 6. Impact study.

(a) Report.--No later than one year following the effective

date of this subsection, the department, in consultation with

the Pennsylvania Public Utility Commission, shall issue a

report, including all of the following information:

(1) The number and location of any existing or planned

20230HB1476PN1662 - 5 -

qualifying crypto-asset mining operations, including which

operations are located in an environmental justice area.

(2) The amount of greenhouse gas emissions and other air

pollutants that are:

(i) released by an onsite energy source used by a

qualifying crypto-asset mining operation; and

(ii) attributable to offsite-generated electricity,

steam, heat or cooling provided to a qualifying crypto-

asset mining operation.

(3) The anticipated increase of new, and expansion of

existing, qualifying crypto-asset mining operations.

(4) The potential impacts of electric energy consumption

by qualifying crypto-asset mining operations, including by

prolonging the use of fossil fuel generators, on the ability

of this Commonwealth to achieve stated greenhouse gas

emission reduction goals.

(5) The ecological impacts, including ecological impacts

associated with electronic waste generation and the use or

discharge of cooling water, caused by qualifying crypto-asset

mining operations.

(6) The potential public health impacts due to the

reduced air and water quality and increased water stress on

communities near qualifying crypto-asset mining operations.

(7) The potential public health and ecological impacts

from noise generated by qualifying crypto-asset mining

operations.

(8) The amount of electric energy consumed by each

qualifying crypto-asset mining operation, including the time

of use of electricity and the potential grid stress posed by

the power load of the qualifying crypto-asset mining

20230HB1476PN1662 - 6 -

operation.

(9) The source of electric energy consumed by each

qualifying crypto-asset mining operation.

(10) An analysis of energy use and greenhouse gas

emissions by type of consensus mechanism.

(11) An analysis of demand-response programs negotiated

between qualifying crypto-asset mining operations and

electric utilities.

(12) An analysis of potential rate-design measures that

could be implemented by State and local regulators to reduce

the energy consumption and dependence on fossil fuel energy

sources of qualifying crypto-asset mining operations.

(b) Report submission.--The department shall submit the

report required under subsection (a) to the Governor, the

chairperson and minority chairperson of the Environmental

Resources and Energy Committee of the Senate and the chairperson

and minority chairperson of the Environmental Resources and

Energy Committee of the House of Representatives no later than

one year following the effective date of this subsection.

required under subsection (a) on the department's publicly

accessible Internet website.

Section 7. Regulations.

The department and the Environmental Quality Board shall

promulgate regulations as necessary to implement the provisions

of this act.

Section 8. Effective date.

This act shall take effect immediately.

20230HB1476PN1662 - 7 -