Texas Senate Passes Bill to Limit Bitcoin Miners' Participation in Demand Response Programs

Bill likely to fail in the House, says miner Marathon Digital.

AccessTimeIconApr 12, 2023 at 6:11 p.m. UTC
Updated Apr 13, 2023 at 6:39 p.m. UTC

The Texas Senate passed a bill that will cap how much bitcoin (BTC) miners can participate in demand response programs, under which they get paid to curtail their operations at times of high energy demand.

Bill SB 1751 passed the Senate with uninanimously and is now heading to the House. If approved, it will have to be signed into law by Texas Governor Greg Abbott.

The bill aims to limit bitcoin miners participating in demand response programs – under which they get paid in credits to turn off their operations when the power grid sees a surge of demand – to 10% and abolish tax abatements for the industry.

The House vote is expected to be more contentious, in part because bitcoin miners have cranked up their advocacy against the bill. Three lobbying groups including the Texas Blockchain Council, the Chamber of Digital Commerce, and Satoshi Action Fund launched a campaign against the bill on Monday, which they say is "anticompetitive."

Bill SB 1751 will likely fail in the House because "the opinions in the House are much more aligned with the positive aspects and the benefits of bitcoin mining," said Fred Thiel, CEO of bitcoin mining firm Marathon Digital Holdings (MARA), which has some of its operations in Texas.

Industry members and supporters argue that miners' flexibility in powering on and off is an asset to the Texas grid. Miners can fund energy generation capacity when there is little demand for power, and turn off when power is needed for the rest of the grid.

But to critics, such as Texas resident Jackie Sawicky, who has organized hundreds of local residents in a group called Concerned Citizens of Navarro County to campaign against Riot Platforms (RIOT) – one of the largest miners in the state – the program amounts to subsidizing miners for their operations.

Edited by Aoyon Ashraf.

CORRECTION (April 13, 7:30 UTC): An earlier version of the story said that the bill passed with one vote against it.


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Eliza Gkritsi

Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.