On February 25, the Oregon State Bar’s Energy, Telecommunications and Utilities Section (which I chair) sponsored a CLE on the Marijuana/Electricity Nexus. What did we learn?
- While legal in some states, cannabis cultivation remains illegal under Federal law.
- Legalization of marijuana may have a significant impact on electricity consumption. Currently, marijuana cultivation represents 1-3% of total national electricity use. A modern indoor cultivation facility has the same energy density as a server farm.
- In Colorado, indoor cannabis growers’ monthly bills range from $20,000 to $100,000 per month. Energy costs represent approximately 50% of a growers’ costs
- Utility investments needed to upgrade the distribution system to meet marijuana demand are at risk. Changes to Federal policy (enforcing Federal anti-marijuana laws) may result in stranded investments.
- Increased load growth in BPA preference customers may result in them exceeding their high-water mark and forcing them to procure Tier 2 resources.
- There are enormous opportunities to deploy energy efficiency programs to reduce consumption related to marijuana cultivation, but Federal policies limit the ability of utilities to use traditional energy efficiency funding streams. It’s not yet clear if market forces alone will lead to widespread adoption of energy efficiency measures.
Oregon regulations may eventually require cannabis growers to procure renewable energy. Some growers may seek to acquire 100% renewable energy as part of their branding strategy.
If you are a grower looking to acquire renewable energy, contact us and we can help you explore your options. And if you are a small utility struggling to meet new demand in your service territory, we can help you too.
