California now recognizes both recreational and medical cannabis as an agricultural product, so the Pacific Gas & Electric Company is following suit by offering cannabis cultivators the same power rates and rebates they provide to other agricultural producers.
The change took effect Wednesday and applies to cannabis cultivators that have obtained a cultivation license from their local government. If 70 percent or more of the company’s annual energy use on the meter is for agricultural uses such as growing the plants or pumping water for irrigation, according to PG&E.
Medical marijuana has been recognized as an agricultural product since the start of 2016 after the passage of the Medical Cannabis Regulation and Safety Act in 2015 with recreational cannabis following in November 2016 after the passage of Proposition 64, also known as the Adult Use of Marijuana Act.
PG&E spokeswoman Andrea Menniti said that PG&E did not offer the agricultural energy rates to medical cannabis growers initially due to restrictions in state and federal laws, but said that the company began to consider offering the rate after the passage of Proposition 64.
Energy use by the cannabis industry has been a controversial topic for some Humboldt County communities such as Arcata, which implemented an excessive energy use tax in 2013 with the help of PG&E. The tax is meant to target indoor marijuana grows by assessing a 45 percent tax on residences that use more than 600 percent of the energy used to power an average home.
Menniti said that little data exists on how much energy the cannabis industry uses, but stated that the company is going to be tracking this data from here on out in order to improve their energy system. In this way, she said the company can work to provide more affordable rates to customers and improve energy efficiency in the industry.
PG&E wrote in a news release that it recognizes the cannabis industry is very energy-intensive and compared its energy use to that of data centers.
“We’ve met with representatives of the emerging legal cannabis industry and listened to their needs,” PG&E Customer Service Vice President Deborah Affonsa said in a statement this week. “We are here to help our customers make smart, efficient and affordable energy choices. Now that cannabis is in California’s future, our next step is to work with these new agricultural customers and make this industry as energy efficient as possible.”
PG&E’s decision comes a day after the California Public Utilities Commission hosted a set of panel discussions to discuss energy needs and clean energy goals with cannabis industry officials. Television station KPIX reported that CPUC President Michael Picker told an audience that even a one- to two-percent uptick in electricity demand related to cannabis growing — what Colorado experienced after legalizing all pot use — could put a serious strain on the state’s power grid.