Riot Platforms discloses $31.7M in ERCOT power and demand-response credits for August 2023 — record single-month curtailment payout to a Bitcoin miner

Opening

On September 6, 2023, Riot Platforms (NASDAQ: RIOT) disclosed in a press release — simultaneously filed with the SEC as Exhibit 99.1 — that it had earned $31.7 million in power and demand-response credits from the ERCOT grid operator during August 2023, a month dominated by a record Texas heat wave. The figure set a new single-month record for curtailment payments to a Bitcoin miner.

What Happened / Key Facts

During August 2023, Riot curtailed operations at its Texas mining campuses (Rockdale and Corsicana) by more than 95% during periods of peak grid demand. The financial result:

The $31.7 million single-month total exceeded the sum of all curtailment and demand-response credits Riot received in all of calendar year 2022.

Year-over-year change: Power credits were up 709% from August 2022 ($3.0M); demand-response credits were up 2,933% ($0.2M in August 2022 vs. $7.4M in August 2023).

In Bitcoin equivalency, CEO Jason Les noted that at August’s average Bitcoin price, the credits “equated to approximately 1,136 Bitcoin.”

Mechanism: Power curtailment credits derived from Riot’s ability under long-term Power Purchase Agreements to sell contracted power back to the ERCOT grid at market-driven spot prices during high-demand periods. Demand response credits were earned through ERCOT’s formal demand-response programs (Responsive Reserve Service, Emergency Response Service) by maintaining curtailment capability as a Controllable Load Resource.

Who bears the cost: ERCOT’s ancillary service costs are socialized through the settlement process across all load-serving entities — and ultimately across Texas retail electricity consumers. Residential customers cannot participate in ERCOT’s demand-response programs.

Why This Event Matters

The August 2023 disclosure crystallized the “ratepayers pay miners” dynamic that congressional critics (Sen. Markey, Sen. Warren) had flagged the prior year. Riot earned more in one month from shutting down than it had earned all year from the program in 2022 — demonstrating the program’s potential scale during extreme weather and validating critics’ concern that climate-driven heat waves would increase, not decrease, these payouts.

The disclosure also illustrated why Bitcoin mining in ERCOT is structurally different from mining elsewhere: Riot’s energy strategy treated curtailment payments as a competitive cost-reduction feature (“Texas energy strategy reduced production costs by $31M,” per CoinTelegraph’s headline), not an emergency measure.

Broader Context

The August 2023 event occurred against a background of rising congressional scrutiny. In October 2022, Senators Markey, Warren, and six others had sent a letter to ERCOT citing the earlier $9.5M Riot payment in July 2022 and projecting potential miner subsidies of up to $170M annually. The August 2023 figures validated the concern about scale. The full calendar year 2023 total reached $71.2 million (per Riot’s 10-K), making 2023 the single largest year of documented ERCOT curtailment payments to a Bitcoin miner.

Research Gaps

• Comparable disclosure data from other ERCOT-connected miners (Marathon Digital, Core Scientific) for August 2023 — only Riot published detailed monthly credit breakdowns.
• The specific ERCOT market products and settlement line items through which these payments are allocated to load-serving entities and ultimately to ratepayers.

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