Cannabis grows — legal or not — are far from business as usual for electric co’s

WESTMINSTER — Since marijuana was legalized in Colorado, the standard meter read and utility line check aren’t that simple anymore.

Utilities have had to adapt on the fly to a surge of customers that bring with them heavier energy loads and heftier revenues; but they also have had to account for the unexpected, said representatives of Colorado’s electric providers at a Monday conference.

“It’s not all wine and roses,” said Paul Erickson, chief executive officer of Sangre de Cristo Electric Association cooperative.

Illegal grows operate within some of the counties Sangre de Cristo Electric serves in central Colorado — creating unexpected safety hazards such as guns being drawn on employees of the utility, Erickson said. The all-cash transactions from the legitimate enterprises pose security risks as well, he added.

“It puts us in a tough place, and it’s no-win,” he said.

The good, the bad and the ugly of marijuana legalization’s effects on the state’s electric utilities were put into the spotlight at a day-long conference hosted by the Colorado Rural Electric Association. The organization’s “Pot & Power” conference delved into topics such as energy demands in cannabis cultivation; sustainability efforts; safety risks and concerns; legal and enforcement best practices; and potential legislative measures.

Following the recent economic recession, low or declining energy loads were seemingly the new normal for utilities in Colorado.

Then came the “bright, shiny exception to the rule,” said Dan Hodges, government affairs liaison at Colorado Springs Utilities.

“The marijuana industry is using a heck of a lot of power,” he said.

Utilities have to walk a fine line, said Jeff Bauman, electrical engineer for the Cowlitz Public Utility District in Washington state, which voted to legalize recreational marijuana in 2012 — the same year as Colorado.

On one hand, utilities are obligated to provide the proper amount of power for the high-use customers who operate well within the bounds of the law, he said. On the other, they also have to account for the precarious nature of gray- and black-market operations — notably concerns of safety and logistics.

“When everything legalized, they started blowing up transformers,” Bauman said.

Cowlitz hoped to address the costly losses by being proactive, he said, contacting the heaviest energy users and offering a bit of a compromise: If they pay to upgrade the transformer, then Cowlitz would cover the cost of the old one. Otherwise, if the high-energy user were responsible for the blown device, they would have to pay for both.

“Most of the time they don’t understand that the little box out in their backyard is the limiting factor,” he said.

As to the other concerns enveloping the service to gray- and black-market operations as well as state-legal operations that are illegal in the eyes of federal law, regulatory attorney Tom Downey recommended that utilities follow their existing protocols and policies and shift the enforcement burden to other entities.

“Don’t put yourself in the place of law enforcement; don’t put yourself in the place of safety agencies,” said Downey, a director at Ireland Stapleton Pryor & Pascoe P.C. in Denver.

A couple of newly passed bills are meant to help address concerns around illegal growing operations, said Mark Bolton, senior deputy legal counsel and marijuana adviser to Gov. John Hickenlooper.

Under two new laws, the state ratcheted down the maximum allowable home-grow plant counts to 12 from 99; implemented stricter protocols for plant count exceptions; dedicated millions of dollars to rural law enforcement agencies to clamp down on gray- and black-market activity; and banned marijuana growing cooperatives.

“I think there’s more we can do in this space,” he said to conference attendees.



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