Paducah Power System presents clean audit and details revenue from three Bitcoin-mining customers
January 28, 2025 | Paducah City, McCracken County, Kentucky
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Paducah Power System officials presented the utility’s annual audit to the Paducah Board of Commissioners on Jan. 28, 2025, saying the audit opinion was clean and financial operations showed strong stability and control.
"If you remember anything, it's 95%," Doug Hanley said, summarizing the utility’s comparison of actual results to budget: total revenues, expenses and net results each landed at roughly 95% of budget. Hanley, who presented the audit and identified himself as the organization’s finance lead, said residential bills for a 1,000-kilowatt-hour month have fallen in nominal terms from $157 in January 2022 to about $152, a $5 reduction that he said outpaced inflation.
Hanley also outlined a new and growing revenue stream: electricity sales to cryptocurrency "Bitcoin mining" customers. He described three existing mining customers that currently represent a concentrated, interruptible, high-load-factor demand. Hanley characterized the sites as containerized, plug-in operations with concentrated megawatt loads: "Small is 1 megawatt. The medium is 4 megawatts. The large one is 18," he said.
Hanley gave the board figures he said were year-to-date and annualized shares: those three customers accounted for about 4% of the utility’s system energy sales in the prior comparable period, had grown to roughly 19% year to date, and—if annualized at the year-to-date rate—would represent about 33% of system sales, he said. He warned that the business is volatile and that miners can disconnect quickly if market conditions change.
To manage that volatility, Hanley said the utility does not budget miner revenue until it is realized and will split distribution-margin revenue when it is received. "Ten percent is immediately gonna go into the PCA calculation," Hanley said, referring to the Power Cost Adjustment, "The other 90% is gonna go into a rate stabilization fund, which we will use to defuse debt or pay capital expenditures, which will lower the rates over the long term." He said the pricing structure for miners is interruptible and designed so the utility does not assume market-power risk on the commodity portion of the sale.
Commissioners and the city’s Paducah Power board representative praised staff for management and responsiveness; one commissioner who serves on the Paducah Power board said the utility’s operations and emergency response during recent storms had been notable.
Hanley also discussed the city’s participation in the Kentucky Municipal Power Agency and the Prairie State resources, noting that the agency markets excess Prairie State output and uses hedging strategies to lock in favorable prices and reduce volatility.
No commission action was required; the utility presented the audit and asked the board to receive and file the report.
"If you remember anything, it's 95%," Doug Hanley said, summarizing the utility’s comparison of actual results to budget: total revenues, expenses and net results each landed at roughly 95% of budget. Hanley, who presented the audit and identified himself as the organization’s finance lead, said residential bills for a 1,000-kilowatt-hour month have fallen in nominal terms from $157 in January 2022 to about $152, a $5 reduction that he said outpaced inflation.
Hanley also outlined a new and growing revenue stream: electricity sales to cryptocurrency "Bitcoin mining" customers. He described three existing mining customers that currently represent a concentrated, interruptible, high-load-factor demand. Hanley characterized the sites as containerized, plug-in operations with concentrated megawatt loads: "Small is 1 megawatt. The medium is 4 megawatts. The large one is 18," he said.
Hanley gave the board figures he said were year-to-date and annualized shares: those three customers accounted for about 4% of the utility’s system energy sales in the prior comparable period, had grown to roughly 19% year to date, and—if annualized at the year-to-date rate—would represent about 33% of system sales, he said. He warned that the business is volatile and that miners can disconnect quickly if market conditions change.
To manage that volatility, Hanley said the utility does not budget miner revenue until it is realized and will split distribution-margin revenue when it is received. "Ten percent is immediately gonna go into the PCA calculation," Hanley said, referring to the Power Cost Adjustment, "The other 90% is gonna go into a rate stabilization fund, which we will use to defuse debt or pay capital expenditures, which will lower the rates over the long term." He said the pricing structure for miners is interruptible and designed so the utility does not assume market-power risk on the commodity portion of the sale.
Commissioners and the city’s Paducah Power board representative praised staff for management and responsiveness; one commissioner who serves on the Paducah Power board said the utility’s operations and emergency response during recent storms had been notable.
Hanley also discussed the city’s participation in the Kentucky Municipal Power Agency and the Prairie State resources, noting that the agency markets excess Prairie State output and uses hedging strategies to lock in favorable prices and reduce volatility.
No commission action was required; the utility presented the audit and asked the board to receive and file the report.
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