The Guizhou Provincial Development and Reform Commission on Monday said any uncovered cryptocurrency mining farms will face an increased electricity rate of 2 yuan (US$0.3) per kilowatt-hour for the power used in the period they were in operation.
China banned crypto mining in September, but underground mining activities persist.
The threat of penalties in the form of higher power charges is meant to stem what seems to be a resurgence of such mining operations, which consume large amounts of electricity.
Guizhou joins at least four other Chinese regions in introducing similar penalties.
In January, China controlled 21.1% of the global Bitcoin hashrate, to become the second-largest Bitcoin producer, trailing only the 37.8% in the U.S., according to the Cambridge Centre for Alternative Finance.