Published in Energy

ENERGY: Environmental groups and utilities brace for energy-intensive cannabis operations

BY Sunday, August 18, 2019 06:00pm

Michigan has had its share of blackouts and brownouts over the years. Could “greenouts” be on the horizon? 

Roughly 100 facilities in Michigan are growing medical marijuana, but the state doesn’t have a formal process to measure the electricity usage at these energy-intensive facilities.

The industry’s energy demands are expected to grow as recreational licenses are issued, raising questions about the potential impact on the electric grid, particularly in rural areas.

“Someone needs to sit down and map this stuff out: where the demand is going to be, what’s the potential impact on the grid, and where are the weak points,” said Saulius Mikalonis, an attorney at Plunkett Cooney in Bloomfield Hills. Mikalonis leads the firm’s cannabis and environment, energy and resources industry groups.

Existing environmental regulations apply for cannabis companies to comply with issues like air emissions and water discharges, but the state doesn’t have any requirements for companies to track energy usage. Mikalonius says this is a gap that needs closing based on data from other states. 

For example, cannabis growing comprises 3 percent of electricity consumption in California, while half of Colorado’s load growth since 2012 is from marijuana growing. Over a six-month period, the utility Pacific Power reported at least seven power outages in Portland, Ore., due to indoor marijuana growing, according to the American Council for an Energy-Efficient Economy.

“We need to get a handle on energy usage and how we’re going to deal with it,” Mikalonis said.

But even if energy usage is measured, another challenge is qualifying for energy efficiency financing to deal with the load growth. While state and local programs may be available — such as Property Assessed Clean Energy (PACE) financing — federal banking regulations restrict companies’ borrowing upfront. With large cash investments, Mikalonis said it’s common for entrepreneurs to forego upfront costs on something like energy-efficient systems and lighting that would save money long term.

Consumers Energy has formed a task force to help developers — including marijuana growers — evaluate energy needs at potential sites. This includes infrastructure needs, rate options and potential efficiency incentives, said Consumers spokesperson Katelyn Carey.

“Growing marijuana is an energy-intensive industry, and we are working to understand the overall impact on our system,” Carey said.

The utility has also had conversations with the Michigan Public Service Commission to address any questions. MPSC spokesperson Nick Assendelft said the issue is on the agency’s “radar” as it tracks regulated utilities’ anticipated load growth more broadly in the coming years.

Mikalonis said the lack of a statewide plan on energy use is part of the industry’s growing pains in Michigan.

“It’s all so new, everyone is waiting to see what happens, but there is no statutory provision to say, ‘Look at this,’” he said. “You can’t manage what you can’t measure.”

Read 1252 times Last modified on Friday, 16 August 2019 13:12
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