I beg to differ. For a decade, Riot has built its "power first" strategy (for Bitcoin mining) with vast corporate handouts from the isolated Texas power grid. ERCOT allowed Riot to get paid real cash -- into the middle double digit millions per year -- from the government/ordinary residential electricity customers in jerk-water, dusty West Texas. Governor Abbott presided over sweetheart crony boards that paid Riot NOT to take electricity loads it itself was supposedly building, on hot (or cold) days.
Effectively, this simply forced residential customers to pay for Riot's electric dreams. But no more.
The wind has shifted in Texas, and the people are against vast noisy water- and electricity-sucking sucking data/compute centers.
Especially when they see their electric bill dollars are directly paying for a corporate boon-doggle like this.
So, Gov. Abbott has charged a blue ribbon (but political) panel with making study recommendation (due by New Year's 2027), to make the companies like Riot Platforms, Marathon Digital, AMD and Anthropic pay the fully loaded market prices for electricity connections in Texas. So this 20 year deal. . . may well be a death trap door -- not a rescue boat. Hilarious.
But you don't have to believe me; believe Riot itself, on the topic. Consider Riot's newly revised risk factor, in its own SEC Form 10-Q filed two nights ago --
. . .Our access to power is dependent on our electrical distribution providers, grid operators, and regulators, which collectively manage whether our operations are performing in accordance with market rules, requirements, and regulations. PUCT, ERCOT, and Oncor collectively oversee the regulatory, administrative, and delivery aspects of our power supply in Texas; MISO and Big Rivers Electric Corporation oversee our power supply at our Commerce site in Kentucky. Tennessee Valley Authority oversees the delivery and regulation of the power supply at our Blue Steel site in Kentucky. Regulatory scrutiny of bitcoin mining facilities and their energy consumption has intensified. . . .
This scrutiny, in addition to increasing pressure at the federal level from the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation, has led, and may continue to lead, to new governmental measures regulating, restricting, or prohibiting the use of electricity by data centers and bitcoin mining operators, or increasing power costs for these types of consumers. . . .
If ERCOT determines that our data centers’ substantial power usage negatively affects grid reliability, it could issue a curtailment order, requiring us to reduce or cease our power use immediately, and our power supply in Texas could be partially or fully curtailed.
More recently, in 2025, the Texas legislature enacted Senate Bill (“SB”) 6 to support ERCOT’s grid reliability by, among other things, proposing minimum transmission rates on certain large loads and removing “phantom loads” from the interconnection queue to improve the accuracy of future load growth projections. SB 6 requires the PUCT and ERCOT to create new processes and impose new requirements for the interconnection of facilities with large electrical loads of at least 75 MW, requires security-type payments as part of the initial interconnection request, and creates a new approval requirement for co-locating generation with large loads. . . .
The PUCT Commissioners are scheduled to hold an Open Meeting on August 14, 2026 to discuss related policy issues, including ERCOT’s audit and information-collection plans. Because certain of our Texas data center projects are advancing through the ERCOT interconnection process, these actions could delay or prevent interconnection of those projects, increase our costs, reduce expected incentives, and have a material adverse effect on our business and results of operations. SB 6 also requires the PUCT to amend its wholesale transmission cost-allocation rules by December 31, 2026, and the PUCT is considering measures that could require large loads such as our facilities to bear a greater share of transmission system upgrade costs, to pay minimum demand charges based on contracted peak demand for a period of 20 years, and to move from the current four coincident peak (“4CP”) cost-allocation methodology to a new 12CP cost-allocation methodology.If adopted, these measures could materially increase our transmission-related charges and limit our ability to manage power costs through demand-response and 4CP-avoidance strategies on which we have historically relied. SB 6 further directs ERCOT and the PUCT to establish curtailment and demand-management obligations for large loads, including protocols to curtail large loads interconnected at transmission voltage after December 31, 2025, during firm load-shed events and a reliability service under which ERCOT may procure demand reductions from large loads and deploy them on short notice during emergency grid conditions, any of which could require us to reduce or suspend operations with limited advance notice. ERCOT has also amended, and continues to evaluate, its processes for interconnecting large electrical loads. . . .
Hilarious -- this is a sub-$5 stock (RIOT), now trading at about. . . yep, $20 on the NASDAQ. [Long dated puts, anyone?] You've been warned. And amply, so. Heh.
नमस्ते
No comments:
Post a Comment