Utilities Work With Cannabis Growers To Save On Power

Utilities Work With Cannabis Growers To Save On Power

Despite knowing for years that electricity is a major expense that can significantly affect everyone’s bottom line, marijuana businesses – especially growers – are still struggling to keep costs manageable.

The good news is that a burgeoning number of utility companies are working with cannabis cultivators to better manage costs by:

  • Conducting in-depth case studies to better understand energy-consumption issues.
  • Assigning employees to work exclusively with marijuana businesses.
  • Recommending lighting as well as heating, ventilation and air-conditioning (HVAC) systems, which they say can save cultivators tens of thousands of dollars annually.

1. Keep an open mind

Electricity consumption typically is the second-largest cost incurred by indoor cultivation facilities. That said, marijuana business executives can benefit from working with utility operators – provided an MJ exec is willing to as well.

“In May of 2017, I started devoting 100% of my time to the cannabis operations coming into our territory, knowing that all those companies were going to fill one portfolio of commercial account management,” said Matt McGregor, strategic account manager, cannabis operations, for the Sacramento Municipal Utility District (SMUD).

McGregor estimates he has roughly 200 marijuana customers, mostly growers, but also about two dozen customers involved in extraction, infusion, processing and packaging.

While more cultivators are accepting or seeking help from utilities, many remain leery.

“Some growers are extremely open and want us to learn,” McGregor said, “and some, we have just one conversation with and then we never see them again.”

2. Understand the public/private difference

Not all energy companies are willing to help. Their cooperation depends in large part on whether they are dependent on one of the nation’s four federal power administrations which serve most of the United States, or one of the nation’s federally owned companies such as the Tennessee Valley Authority.

Utilities that receive their power from these federal entities generally balk at providing cannabis businesses because they fear federal interference.

Private utilities are less prone to those fears. Consider Puget Sound Energy (PSE), an investor-owned utility in Washington state, which has helped about 80 cannabis customers with about 100 energy-savings projects since 2014.

PSE doesn’t get power or conservation funds from the region’s federal power company, the Bonneville Power Administration.

Rather, PSE buys the power it sells to customers off the market or from its own power generation.

“So, we didn’t have to be concerned about losing federal funding by serving the cannabis sector,” said David Montgomery, an energy management engineer with PSE.

He added that cannabis businesses are “legal within the state and the state is our governing body, so we’re going to treat them like any other customer.”

Xcel Energy – a private utility operator serving eight Western and Midwestern states including Colorado – goes by the same premise.

“We work with marijuana companies because they are legal operating entities in the state of Colorado,” Xcel spokesman Mark Stutz said.

“We are regulated at the state level, and to deny services would be in violation of state law.”

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