We all know how energy-hungry cannabis can be. We spoke with Bob Gunn, energy advisor and CEO of Seinergy, about powerful opportunities for cultivators to not only save money, but save the environment in the process.
Bob grew up in the shadow of a coal-fired power plant. Though the Waukegan Generating Station, in Illinois, shuttered in 2022, and Bob moved from Illinois to Washington state to work for the local electric utility, he has long devoted himself to studying how people and businesses use energy.
So by the time regulated cannabis came to Washington in 2014, he knew he could serve this burgeoning industry, already burdened by its reputation as an energy-intensive enterprise, by becoming an independent voice and helping growers design more intelligent, profitable, and energy-efficient operations.
What opportunities can energy advisors uncover for commercial cannabis growers?
A good energy advisor balances the potential for savings against any disruption to business as usual. After all, you’re only eligible for the cost savings that you know to take advantage of and can actually carry out.
When partnering with cannabis cultivators, Bob and his team ask these questions first, as they are the easiest immediate gains, as they require little to nothing from the business itself:
a) Is the business eligible for agricultural tariffs?
b) Is the business paying a fixed or variable energy rate?
c) Were they switched from one to the other because they experienced growth?
d) Was it an appropriate rate at the time, and is it still appropriate today?
e) Does the business operate in a regulated or deregulated energy state?
f) If energy-deregulated, can a private energy supplier beat the utility’s pricing?
Bob and his team have identified customer utility bill savings as much as $15,000 per month on energy by simply analyzing a few energy bills. Depending on the circumstances, Seinergy can even seek refunds from utilities for overpayment, sometimes to the tune of hundreds of thousands of dollars.
“Often the utility will repay that, and, counterintuitively, they don’t begrudge it. They have a responsibility to provide the best service to their customers at monopoly. It actually reduces their audit risk when these things come to light and are fixed ahead of time.”
What if I like the way I grow cannabis now, and don’t want to change in order to save on energy?
There is a misconception that energy advisors want to shape the ways growers grow. While utilities certainly incentivize high-energy customers to adopt more dynamic or efficient practices, Bob and Seinergy would rather act as an energy- and cost-conscious advocate for growers so they can make informed decisions about their energy consumption that benefit the business first and foremost.
“Anything that’s going to sacrifice the quality of a grower’s product or yield is a nonstarter. For example, taking HVAC offline during peak pricing or high grid demand might invite mold to grow in a room. Forget about it.”
Bob uses the example of load shaping versus demand response. Demand response is a voluntary program growers can enroll in, and they can choose to dim their lights when demand spikes, in many cases with no penalty for nonparticipation. Growers could see a huge financial benefit for negligible targeted dimming practices.
“Depending on the utility, some cultivators could be earning over $159k per MW per year just to be on standby to reduce loads during peak demand events.”
Load shaping, however, is a permanent operational change, but one that need only be undertaken if the business can allow it. Seinergy clients have saved tens of thousands of dollars a month in energy costs by, say, scheduling flower lights to come on an hour earlier, and veg lights to go on later in the evening. These opportunities only exist where energy rates vary throughout the day, such as in California. For many, it makes sense to bring in labor an hour earlier than in the middle of the night, but scheduling labor and energy around peak rates has its limits. “People don’t want to work a swing shift just to save a few dollars on electricity. They might have families, and they want to be home when the kids come home from school.”
But what matters most is whether opportunity is worth it for your operation. Only you can answer that question, but Seinergy energy advisors are dedicated to giving you all the facts before you decide one way or the other.
What common billing errors do cannabis growers experience?
Seinergy energy advisors hunt down incongruities in what you’re billed versus what you were supposed to be billed. They’ve seen it all:
$$ Paying the wrong taxes
$$ Paying the wrong rate class
$$ Mismatched transition from the wrong rate to the right one
$$ Incorrectly estimated bill reads
$$ Overlapping changes to bill rates
$$ Misapplied monthly fixed charges
$$ Misapplied demand charges
And as we mentioned earlier, Seinergy has a network of specialized lawyers who are trained to recoup these losses, so uncovering these discrepancies lead to both short-term and long-term savings.
“Often manufacturing and agriculture businesses are exempt from sales tax and certain utility franchise taxes,” Bob said. “If you’re using electricity as an input good and, much like a raw material, you may be exempt from paying sales tax on the utility expense. You have to demonstrate from an energy study that, say, 80% of your facility’s electricity use is attributable to the manufacturing process, but if you can then you may be exempt from sales tax or even eligible for a refund. This type of analysis can yield thousands of dollars in monthly savings for a grower.”
Beyond cost savings, what are the macro benefits to energy advising?
Back when cannabis growers operated in gray and black markets, they were shamed for their high energy use. Even after moving into a legal, regulated space, many seek to redefine their reputations from electricity hogs to pillars of community and sustainability.
A lot of ink has been spilled about the environmental benefits of LED retrofits and the load shaping and demand response programs already discussed, but what doesn’t get the same press is how energy-efficient cannabis cultivators help their communities avoid what Bob calls “drag racers,” the power plants that sit idle and ramp up to meet high demand, the worst offenders in terms of carbon footprint.
“By easing your load on the grid,” Bob said, “you’re contributing to fewer rolling blackouts and to fewer peak power plants.”
Remember the Waukegan Generating Station from Bob’s childhood? He and Seinergy have set a goal to save as many megawatt-hours through their advising as that power plant generated with coal. So far Seinergy has saved more than 542 million kWh annually, the equivalent of “adding solar to 151,000 homes,” according to its website.
“Building a virtual power plant is a visual representation of the power plants we didn’t need to build in order to power our homes and businesses today,” Bob said.
Bob touts one of his cannabis clients in Los Angeles, who participated in a demand response program and voluntarily dimmed 150 kilowatts on one day of high demand. It changed next to nothing about how the business grew its plants, but that one decision earned the facility an award from the program and notoriety within their neighborhood.
“There is a certain social license that is required to grow cannabis,” Bob said. “That was a big moment for them. They realized, oh yeah, we can participate in this energy conversation, not just as a strain on the grid, but we can help the utility with their own goals by being dynamic.”
What infrastructure investments do you advise your clients to make in 2025?
If you’re building a new CEA facility in 2025, Bob recommends investment in tech that helps differentiate your critical and noncritical loads. Seinergy does a lot of work in the microgrid space, which analyzes what infrastructure would be needed to power community essentials in the event of an emergency: city hall, the library, the hospital, the food bank, and so on.
Critical loads on a cannabis farm include:
+ HVAC to control temperature and prevent mold.
+ Some lights to maintain photoperiod, though not all lights actually add to production.
+ Physical security and cameras for compliance purposes.
+ Irrigation pumps with specific nutrient dosing schedules to maintain
“This might only be 10% to 15% of your load,” Bob said. “It would be really wise to wire two of your thirty load panels so they are backed up through a generator or solar-backed battery backup.”
Transformer upgrades are another great opportunity for investment. Though they’re usually expensive and difficult projects to manage, Bob has seen utilities categorize transformer projects as economic development and reimburse growers as much as $500,000 for the whole blueprint—the box, the switch gear, and even the trenching. After all, utilities want you to have an adequate power supply, and they want your business in the long run.
