Energy intensive crypto mining operations represent a growing risk to public power utilities, Fitch Ratings warns.

In a new report, the rating agency said that crypto mining — which typically consumes a large amount of energy — can significantly increase the overall electrical load on power grids. In rural areas, they can become a utility’s largest customer.

While this added consumption promises increased revenue for utilities, the demand can also prove fickle.

“Crypto mining operations are price-sensitive entities that may be quickly scaled back or shut down if mining becomes uneconomical,” Fitch noted.

Utilities that have the available capacity to serve crypto miners must consider the costs and benefits of meeting a large, new demand instead of retaining capacity for other opportunities, it suggested.

“Crypto mining operations typically bring in very little additional economic benefits in the form of jobs or ancillary business to a local economy,” the report said.

For utilities where supply is constrained, the risks are even bigger. They may have to consider whether to invest in building new capacity or procuring power from other markets to meet demand that may ultimately prove ephemeral, Fitch said.

Utilities that build capacity in order to meet the demand from crypto miners take the risk that they will be left with stranded assets and costs to recover (typically by raising prices on remaining customers) if the mining operation shuts down.

This could lead to negative pressure on credit ratings “if operating margins are compressed” or liquidity is weakened by costs inflicted by failed crypto mining.

So far, utilities have addressed these risks by limiting their commitments to crypto mining operations, or by structuring their arrangements to protect the utility if a miner ceases operations, Fitch said.

For instance, utilities in Washington have dealt with increased demand from crypto miners by adopting practices such as introducing new rate structures, setting customer concentration limits, and imposing load moratoriums on crypto mining, it reported.