Riot Platforms reported a $60.3 million loss on power costs in the first half of 2025, offset by $31.1 million in payments from ERCOT for voluntary curtailment under its demand-response program. The net electricity expense totaled $29.2 million against a $145.8 million power spend, with the ERCOT payments covering 21.3% of the bill—an increase from 16.1% in the prior year period.
The company’s power contracts include a fixed-price agreement for 245 megawatts through 2030, structured as a derivative due to accounting treatment that assumes physical delivery is improbable. This classification reflects an energy-trading strategy rather than a conventional power purchase, with Riot effectively selling power it does not intend to consume. The contract’s two blocks extend to 2030, while a third block terminates in October 2027.
Power price dynamics in Texas showed significant volatility. The December 2024 average price settled at $55.70 per megawatt-hour, declining to $48.60 in June 2025. Corsicana, another of Riot’s contracts, shifted from an asset to a liability amid falling forward power prices. Settlement point price differences ranged from +$7 in December to -$12.50 in June, with the floor of the range widening from -$12 to -$45. Capacity contracts, which compensate for availability rather than output, rose from $270 to $331 per megawatt-day.
Congestion revenue rights (CRR) in California’s PG&E territory remained relatively stable, with weighted averages of $2 per megawatt-hour in both December 2024 and June 2025. In contrast, ERCOT’s 4CP program—where transmission charges are set based on load during four 15-minute summer intervals—offers credits that reduce future power bills. Riot’s demand-response revenue totaled $2.8 million in Q2 2025, up from $14.1 million in Q1, reflecting seasonal demand patterns.
The accounting treatment of these contracts hinges on the improbability of physical delivery, a position that could shift if Riot converts facilities to high-performance computing (HPC) use. The company reported $31.9 million in HPC lease revenue in Q2, alongside $12.8 million in mining revenue, down from $47.6 million in Q1. This transition may alter the derivative classification, as hourly consumption would imply physical delivery becomes probable.
Analysts note the divergence between ERCOT and PG&E pricing signals, with ERCOT’s settlement point price difference printing below -$12.50 per megawatt-hour—a key indicator for Riot’s exposure. The company’s Q3 power curtailment credits are expected to exceed the $10.054 million recorded in Q2, though seasonality may limit the strength of this comparison. If credits fall short, it could signal a repricing of ERCOT’s capacity contracts.
The broader implications remain uncertain. Riot’s hybrid model—balancing mining operations with HPC leases—may mitigate losses, but the accounting and contract structures introduce risks tied to power market repricing and physical delivery assumptions.
