Pubdate: Sun, 27 Dec 2015
Source: Appeal-Democrat (Marysville, CA)
Copyright: 2015 Appeal-Democrat
Author: Jennifer Oldham, Bloomberg News (TNS)


DENVER - The $3.5 billion U.S. marijuana market is emerging as one of 
the nation's most power-hungry industries, with the 24-hour demands 
of thousands of indoor growing sites taxing electricity grids and 
unraveling hard-earned gains in energy conservation.

Without design standards or efficient equipment, the growing 
facilities in the 23 states where marijuana is legal are responsible 
for greenhouse-gas emissions almost equal to those of every car, home 
and business in New Hampshire. While reams of regulations cover such 
things as tracking individual plants, package labeling and 
advertising, they lack requirements to reduce energy waste.

Some operations have blown out transformers, resulting in fires. 
Others rely on pollution-belching diesel generators to avoid hooking 
into the grid. And demand could intensify in 2017 if advocates 
succeed in legalizing the drug for recreational use in several 
states, including California and Nevada. State regulators are 
grappling with how to address the growth, said Pennsylvania Public 
Utility Commissioner Pam Witmer.

"We are at the edge of this," Witmer said. "We are looking all across 
the country for examples and best practices."

The corporatization of what was once offthe-grid agriculture is 
taxing electrical systems as the nation prepares to comply with the 
Paris climate agreement and the Environmental Protection Agency tries 
to reduce greenhouse gases from coal-fired power plants, considered 
the single largest domestic source of emissions that contribute to 
global warming.

"Consumers seeking a green lifestyle are likely unaware that their 
cannabis use could cancel out their otherwise low-carbon footprint," 
Evan Mills, an energy analyst for California's Lawrence Livermore 
National Laboratory, wrote in an email. Indoor growing in 2012 racked 
up at least $6 billion a year in energy costs, compared with $1 
billion for pharmaceutical companies, Mills found in a study he did 
independent of the research institution. Some larger facilities use 
as much as $1 million worth of power a month.

ArcView, an Oakland research firm, estimates the retail and wholesale 
marijuana market will reach $4.4 billion in 2016.

Cultivation operations are waiting for new infrastructure to bring 
them power. With the marijuana industry just coming out of the 
shadows, utilities are without data to forecast electrical needs.

"We don't have aggregated energy audits from hundreds of grow 
operations that show us an energy footprint," said John Morris, 
director of policy and regulatory affairs at CLEAResult, an Austin, 
Texas-based consultancy that works with growers and utilities. "We 
have utilities in the Northwest putting in new transformer 
substations to meet the load. Producers are having to go out and 
build infrastructure."

In Colorado, more than 1,234 licensed grow facilities account for 
almost half of new demand for power. In 2014, two years after 
residents voted to legalize marijuana for recreational use, growing 
sites consumed as much power as 35,000 households.

In California, indoor production consumed 9 percent of household 
electricity in the nation's oldest legal medical marijuana market, 
the amount used in 1 million homes, Mills found.

In a Denver warehouse this month, growers wore sunglasses as they 
checked on 150 top-heavy flowering marijuana plants. The 
four-foot-tall bushes were flourishing under dozens of 1,000-watt bulbs.

"All these things consume too much power," said Paul Isenbergh, a 
commercial real estate broker and coowner of the 3,100-square-foot 
medicalmarijuana operation called Sense of Healing. "The air 
conditioning, the lighting, the fans, the scrubber, the humidifier."

The atmosphere is calibrated to mimic outdoor conditions to allow 
growers to reap multiple harvests a year. The intense heat from the 
lights requires air conditioning and fans to keep grow rooms at 75 
degrees, a dehumidifier to prevent mold and a carbondioxide injection 
system. The electricity costs up to $5,000 a month.

Electricity represents as much as 50 percent of an operator's 
overhead, yet profits far outweigh costs, with a pound of medical 
marijuana selling for about $2,500 on the wholesale market, Isenbergh 
said. His costs to raise the weed from clippings are only $600 a pound.

In Arcata, in the marijuana-growing hotbed of Humboldt County, 
officials are banking $300,000 a year from an "excessive energy use 
tax" that went into effect in October 2013. Voters approved the tax 
in 2012 after police and fire departments spent as much as 20 percent 
of their time responding to calls at growing operations.

The City Council placed the measure on the ballot after finding 10 
percent, or 663, of Arcata's households were being used for 
large-scale marijuana cultivation, according to the Pacific Gas and 
Electric Company. Many were receiving subsidized rates based on low 
reported income, said Mayor Michael Winkler.

"Instead of having our electricity use going down, we had roughly a 
30 percent increase in electricity use in five years prior to the 
tax," he said. "We were not meeting our sustainability goals as a 
result. Now we are."
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MAP posted-by: Jay Bergstrom