One of Maine’s most energy-intensive industries will no longer be shut out of the state’s energy efficiency incentive programs.
The trustees of Efficiency Maine, a ratepayer-funded agency that promotes sustainable energy usage, voted 5-2 on Wednesday to reverse a ban on giving energy-efficiency grants to state-legal marijuana businesses, concluding they are just as likely to last long enough to produce the energy savings needed to justify the grant as any other kind of business.
In 2017, Efficiency Maine trustees worried the Trump administration might crack down on cannabis businesses, even if they are state licensed, because they operate outside of federal law. That would make it impossible for any grant recipient to save enough money to meet the program’s cost-effectiveness requirement.
“It takes time to make your money back on these grants,” said Executive Director Michael Stoddard. “Three years ago, we were trying to look into our crystal ball to determine how reasonable it was to determine a cannabis business would have the kind of time it takes to do that. Every project is different, but with most, it takes a number of years.”
Despite initial concerns, however, the Trump administration appears to be leaving the marijuana issue up to the states, he said.
That did not persuade board members David Stapp or Glenn Poole, both of whom opposed the motion.
Stapp, CEO of Peregrine Turbine Technologies in Wiscasset, told the board Wednesday he couldn’t endorse a policy that would help even a state-licensed business break federal law, much like he couldn’t decide to only pay his state taxes and not his federal taxes. We are all American citizens and must abide by the laws of the nation, he said.
“I can’t shake the feeling that we are addressing this problem as if the laws of our country don’t apply to us,” said Stapp, who was board chairman in 2017. “State law has now made this kind of activity legal, but that does not change the federal statute. Because we are still U.S. citizens, we are not exempt from these laws.”
Stapp also worried the board was helping an industry that would hurt Mainers, who would be the biggest consumers of products, while the industry’s profits would be heading out of state now that Maine has dropped its requirement that recreational cannabis applicants be Maine residents. But Chairman Al Hodsdon said that wasn’t any of the board’s concern.
“Guns are used for illicit things, but if (gun manufacturers) were to come to us and ask for funds I don’t think we’d hesitate,” he said. “We’re not really dealing with the end product. We’re only dealing with the energy used. We don’t look at (the end product) under a microscope. We look at it from the energy perspective only.”
Now state-licensed cannabis businesses are welcome to apply for the agency’s commercial and industrial program grants. These complex, tailor-made grants come with their own engineering analysis meant to reduce the consumption and operating costs of Maine’s largest energy users. They cover up to 50 percent of a project’s total cost, capped at $1 million.
The grants are primarily funded by ratepayers, who pay a little extra on their electricity bills with the understanding they will cut energy consumption, making it less likely that utilities will have to make costly upgrades to the local power grid that would drive up everybody’s energy bill.
In fiscal year 2019, Efficiency Maine funded about $1.9 million of these grants to 19 recipients to pay for close to $3.3 million of completed upgrades across 30 projects, according to its annual report. The program pegs the amount of a grant to the projected kilowatt-hours saved. The projects approved last year are expected to save about $5.2 million in avoided electricity costs.
Some of Maine’s biggest marijuana growers would like to use such grants to buy and install LED lights to create the chemical energy plants need to grow, energy-efficient heating and cooling units to keep cultivation rooms at optimal growing temperature, and dehumidifiers to suck the moisture out of the air to prevent mold that can tank an entire crop.
As huge energy consumers, Maine’s cannabis growers pay into the funds that bankroll those grants.
Efficiency Maine doesn’t know how much energy Maine’s cannabis industry consumes. Until recreational sales begin on Friday, the only legal cannabis grows in Maine were medical or smaller home grows. Efficiency Maine can’t track energy consumption of those grows because it has no way to know where Maine’s 3,000 caregivers grew their crops or who was cultivating at home.
In 2016, New Frontier Data, a national cannabis research firm, conducted a review of cannabis energy consumption. Nationally, New Frontier estimated that cannabis growers consumed about 1 percent of the overall electrical output in 2016, which is enough to power 1.7 million houses.
Ratepayer-funded efficiency programs in other states with legal medical or adult-use cannabis have taken a different approach. Many recruit growers, hoping to use grant dollars to reduce the industry’s energy consumption and reduce the burden on their electrical grid and the likelihood of brownouts, blackouts or expensive infrastructure repair or replacement projects.
Only Bonneville Power Administration, which serves three Northwestern states, has held out, noting that it is federally funded.