By Kent Singer, CREA Executive Director
If you asked me five years ago whether the Colorado Rural Electric Association would ever sponsor a “Pot and Power” conference, I would have asked what you were smoking. After all, how could there possibly be a connection between electric co-ops and marijuana?
It turns out there is a significant connection. When our state’s voters approved a ballot measure legalizing recreational marijuana in Colorado in 2012, I’m sure most voters did not give much thought to how that action might affect electric co-ops and other electric utilities. Five years later, however, it’s clear that the legalization of recreational marijuana in Colorado has a significant impact on how electric co-ops operate their systems, interact with their member-owners and provide for the security of their employees.
These issues were the focus at a recent seminar that CREA sponsored in Westminster. We organized the conference as an educational opportunity not only for electric co-op directors and staff, but also as a venue to discuss these issues with law enforcement, the marijuana industry and other electric utilities. We didn’t know whether there would be much interest in the conference, but we had more than 100 attendees with some coming from as far away as California. Everyone, it seems, has questions.
The primary focus of the conference was to provide a forum for discussion about this new Colorado industry and the positive and negative impacts it is having on electric utilities. Marijuana cultivation requires significant amounts of electricity. That has resulted in increased power sales for many utilities. In the co-op world, this means that the costs of operating our systems can be spread to more businesses and potentially limit rate increases for residential and farm and ranch customers.
But the trade-off for increased utility revenues is that more power sales mean more co-op infrastructure, such as substations and transformers, is needed to serve these new loads. That can be a problem if the new marijuana operation is an illegal, unlicensed facility. Who will pay for the co-op’s infrastructure costs when the illegal operation is closed down? Nonprofit, low-margin electric coops need to be cautious when making significant capital investments, so some co-ops adopted specific policies to handle this new category of customer.
Those policies don’t help when the growers simply steal electricity. Growers who operate without the required permits and licenses and export marijuana out of state sometimes don’t request the required electric hookups from their local electric co-op. They wire the operation themselves, sometimes illegally tapping into the co-op’s system. This can mean unsafe wiring that can lead to dangerous situations and fire hazards.
And those with the illegal operations often don’t want co-op crews inspecting their wiring or viewing their operation, so co-op employees must be careful when they make service calls to homes or farms where there are grow operations. Co-op personnel are not in the business of determining if a grow operation is legal or illegal, but they have encountered armed guards and drawn guns. Much of the discussion at the conference focused on how to best handle these situations.
Law enforcement officers also want the co-ops to share information on where suspected illegal grow operations are located. There was a panel discussion at the conference on what law enforcement wants and what co-ops are willing to provide. Most co-ops have policies that prevent them from disseminating member information unless a subpoena is issued, so they are not always able to provide the information sought by law enforcement. Our conference provided an opportunity to discuss how these competing interests can be resolved.
There are many opinions on whether the legalization of recreational marijuana makes sense for Colorado, but it really doesn’t much matter what the opinions are. Recreational marijuana is legal in the state and is now a $1 billion industry with the expectation that it will continue to grow.
Colorado’s electric co-ops are working together to manage the changes this new industry brings. As they do so, they will need to meet the needs of a new industry and, at the same time, strive to protect the safety of their employees and the public.