Richard G. Lorenz 1001 SW Fifth Ave., Suite 2000 Portland, OR (503)

State Law Map Washington = I-502 (2012) Colorado = Amendment 64 (2012) Oregon = Measure 91 (2014) Alaska = Ballot Measure 2 (2014) Washington D.C. = Initiative 71 (2014) Medicinal Marijuana is legal in about 20 other states.

How this affects the Electric Industry Could trigger an increase in power demand. Still illegal under federal law, in other states, and may be prohibited by local laws and ordinances. Raises questions about retail rate-making and service obligations. Creates low-hanging fruit for conservation. But are they forbidden fruit?

Power Demand Indoor marijuana production is a power intensive activity.  Consumes about 200W per square foot.  On a square foot basis, energy consumption is the same as a data center.  A single joint is the equivalent of running a 100 Watt light bulb for about 30 hours.  The industry is estimated to have the annual carbon emissions of a million cars.  Growing four marijuana plants uses as much energy as running 29 refrigerators.

Industry Implications for Power Consumption Industry reports put power consumption for marijuana at 1%-3% of total usage. Between $5 and $15 billion. The Northwest Power and Conservation Council issued a report estimating total marijuana-related load in the Pacific Northwest at 250MW by 2035.

Will Legal Production Mean Cleaner Production? Indoor production unlikely to be moved to outdoor production. Growers may not be motivated to adopt more efficient practices. Lack of education and leadership in efficiency in the near terms because it is still a “shadow” industry. Lack of federal funding for conservation or efficiency programs.

Supreme Court Challenge To State Law Lawsuit has been filed by Nebraska and Oklahoma against Colorado The US Supreme Court, which has original jurisdiction over the case, has asked the federal government to state its position on the issue. U.S. Attorney General Loretta Lynch is not a proponent of the legalization of marijuana and has told Congress that the “law is her lodestar.” The legal question is whether State legalization is “passive” or “active” regulation. Colorado argues that it is not required to mimic or enforce federal law The counter argument is that states are creating a market for a commodity that is illegal under federal law.

Marijuana Under Local Laws Dozens of local governments in Washington have enacted bans on marijuana businesses. Supported by Washington Attorney General Opinion. Under Oregon statute, local governments may prohibit marijuana businesses. May be land use regulations affecting both indoor and outdoor agricultural activities.

Retail Service Policies Can utilities refuse to provide service to activities that are illegal under federal law?  Commissioner asked “Is Cowlitz PUD aiding and abetting a crime?” Should utilities adopt policies concerning cash payments? Should utilities require additional security for service costs? Can or should utilities require an indemnity from marijuana- related customers? Should utilities offer amnesty for customers that were likely stealing power in the past?

Indoor Agriculture Retail Rates Pacific County PUD received a request for service from a 20MW single facility.  Pacific County PUD adopted a new commercial and Industrial rate schedule for anticipated load growth in the marijuana industry.  This required a multi-million dollar investment in a substation and other facilities to service the load. Will that investment be covered if Washington’s law is overturned? Mason County PUD approved a rate classification for marijuana growers and processors.  The rate falls between commercial and industrial and includes a demand charge that reflects the peak capacity needs of the facilities. Boulder County in Colorado is imposing a “charge” of 2.16 cents per kWh on all electricity consumed by marijuana growers. Money will be used on efficiency education programs. Should all utilities have separate rate for indoor agricultural production?