As home pot growers left the region last year, Sonoma Clean Power lost $10 million in revenue
They’re called “superusers” within the power industry, those electricity customers using as much as 200 times the amount of energy in a month than a typical household.
Some of them have big estates, horse stables or electric cars. A small number are older mobile home parks operating on one utility meter. Most are likely growing marijuana indoors, local power agency officials said.
Last year, these “superuser” customers in Sonoma and Mendocino counties with monthly electric bills as high as $20,000 started to disappear.
About 300 homes using the most power in the region closed their accounts or dramatically decreased energy consumption in May and June of 2018, according to Sonoma Clean Power, the area’s green power agency. Although small in number, the loss of these major customers contributed to an unexpected $10 million drop in revenue and expenses last year, agency CEO Geof Syphers said.
After scrambling to figure out why these customers were disappearing, power agency officials determined they corresponded with a marked shift in where marijuana is and isn’t being grown in the region and state, he said.
“We suspect, although I can’t tell you with utter certainty, that most was due to cannabis cultivation leaving the region and going somewhere else in California,” Syphers said.
The state’s commercial cannabis market opened in 2018, bringing with it a set of regulations for the production and sales of pot. Among the new rules, Sonoma County banned cultivation on rural residential properties and most properties smaller than 10 acres. Instead of shifting into agricultural and industrial areas, marijuana cultivators appear to be shifting their operations out of Sonoma County or shutting down.
Power producers in Washington and Colorado had experienced a rise in power demands after marijuana’s legalization there.
Unlike those states, California already had an entrenched and experienced market for marijuana, one based in the loosely regulated medical marijuana market or in the black market, both mostly operating under the radar. The rules were designed to shift commercial cannabis cultivation out of rural neighborhoods into agricultural and industrial areas.
Sonoma Clean Power’s numbers appear to show the new rules and market pressures, such as a drop in marijuana’s wholesale value, are pushing commercial cannabis cultivation out of rural neighborhoods, as lawmakers intended.
The agency, formed in 2012, provides electricity to about 210,000 residential and about 38,000 commercial customers in Sonoma and Mendocino counties with an annual budget of about $186 million. It has nearly 1,500 homes that fall into the “superuser” category, consuming more than 3,500 kilowatt-hours each month, which at the low end is roughly seven times the energy a typical house uses.
Many of these residences use far more power, Syphers said. The disappearance of these residential customers - about 20 percent of the residential superusers - contributed to a drop of 7 percent in energy usage in May and June alone.
“It’s a modest number of households that have a pretty big impact,” Syphers said.
But there has not been a corresponding uptick in electricity use in commercial and industrial areas, which Syphers said was “the big surprise.”
Jigar Patel, president of NorCal Cannabis, a large indoor marijuana cultivation company in Santa Rosa, said it’s further proof that Sonoma County’s traditional cannabis industry, built over years in back sheds on private, rural properties, is disappearing.
Patel’s move away from growing medical marijuana on a west county property to an industrial facility in Santa Rosa stands out among his peers in the cannabis industry, most of whom have simply given up, he said.
“People quit home growing and couldn’t afford to get into commercial production,” Patel said.
Sebastopol-area resident Julie Terry, a former member of Sonoma County’s cannabis advisory group for local marijuana policy matters, counts herself among the longtime local pot growers who reluctantly gave up trying to get a foot in the door of the commercial market.
She and her partner cultivated marijuana for a dispensary in a building on her property for nearly a decade. Terry said her utility bill has dropped about $1,500 since they produced their last harvest before the commercial laws came into effect Jan. 1, 2018.
“That was the time period, the first six months of 2018 when all the little guys, ourselves included, were tearing down their spaces and doing whatever they had to do to make a living after that,” Terry said. “There was just a huge wave of people that got out completely.”
For Sonoma Clean Power, the energy drop last year could have caused significant rate hikes for customers. But Syphers said the timing was fortuitous because the agency, which is constantly adjusting to the rise and fall of power demands, was preparing to buy additional power. Instead, it held back.
“We think the industry is resetting,” Syphers said. “I’m not seeing all of those residential grows come back to Sonoma County. For economic reasons, I think we’ll see that grow in other parts of the state where buildings and electricity are cheaper.”
You can reach Staff Writer Julie Johnson at 707-521-5220 or firstname.lastname@example.org. On Twitter @jjpressdem.